Second Mortgage in Colorado

Not on a rental you do not live in. Colorado's homestead exemption applies only while the property is occupied as a home by the owner or the owner's family, and the exemption amount is tied to that occupancy too: $250,000 for an owner-occupied home, $350,000 where the occupant is elderly or disabled. A rental you lease to tenants carries no homestead exemption. Occupancy is a fact question, so expect it to be confirmed, not assumed. Even on a true homestead, a deed of trust that waives homestead rights takes priority over the exemption at a foreclosure sale. This is not legal advice; your attorney or title company has the final say on your property. See the second mortgage program page for terms.

Colorado draws the line at purpose. The state's mortgage loan originator law covers a residential mortgage loan, defined as one primarily for personal, family or household use secured by a dwelling of four or fewer units, and it makes no distinction between first and junior liens. The Uniform Consumer Credit Code says a consumer loan does not include a loan for a business, investment or commercial purpose, unless the loan is made subject to the code by election. We found no Division of Real Estate or UCCC Administrator guidance on business-purpose seconds, so this is not a licensing opinion. That is why we ask what the funds are for and whether you occupy the property. Talk to your attorney about your own structure.

The second is wiped out once redemption ends, and its holder has 8 business days after the sale to protect itself. Colorado forecloses deeds of trust through the county Public Trustee, with a court order under Rule 120, and a non-agricultural sale is set 110 to 125 calendar days after the notice of election and demand is recorded. A second recorded before that notice gets mailed notice, but only if its recorded deed of trust carries an address. After the sale the owner has no redemption right; only junior lienors can redeem, and only by filing a notice of intent to redeem within 8 business days. Any overbid goes, in recording order, only to junior lienors who filed that notice, and once redemption ends the title is free of liens junior to the one foreclosed. No Colorado statute barring a deficiency for a sold-out junior was located; the foreclosing holder must bid at least its good faith estimate of fair market value, which a borrower can raise as a defense in a deficiency action. This is not legal advice; your attorney or title company has the final say. Read lien position explained before you stack debt.

No. Colorado charges no documentary fee on a deed of trust given to secure a loan. The state's documentary fee applies to deeds that convey title, and the statute exempts any document given to secure payment of a debt, which is what a deed of trust is. No state mortgage recording tax or intangible tax was located. Recording itself is a flat fee per document rather than per page, under a 2024 state law that took effect July 1, 2025: $43 once the state surcharges are added, for any document the law does not price separately. The law lists no separate fee for a deed of trust, and no clerk page names one, so confirm the figure with the county clerk before closing.

The second-lien holder generally has to sign a resubordination agreement. No Colorado statute keeping a junior lien in second position when the first is refinanced was located. The doctrine that can move priority, equitable subrogation, is one the Colorado Supreme Court calls a narrow exception to the recording act, and in the case that said so it applied because the buyers and their new lender had no actual knowledge of the other lien and were not negligent in failing to discover it. A refinancing lender who knows about a recorded second cannot count on it, so plan the resubordination before you shop the refinance. See a second lien behind a DSCR or conventional first. This is not legal advice.

No. They stay residential for property tax. A 2024 bill, SB24-033, would have classified some short-term rental units as lodging property; the Senate Finance committee postponed it indefinitely on April 16, 2024, and it died. No 2025 or 2026 successor bill was located. Short-term rentals are eligible for our second mortgage, subject to underwriting, but whether you can operate one is set by each city or county, so check the local permit rules for your property before you count nightly income.