Rental / DSCR in Fort Collins

No, that cap is gone, and it changes what a by-the-bedroom rental can carry. Colorado's HB24-1007 (the HOME Act, codified at CRS 29-20-111) bars any local government from limiting how many people may live together based on familial relationship, effective July 1, 2024. Fort Collins City Council repealed its own occupancy limit on second reading on July 2, 2024 through Ordinance No. 081, 2024 and Ordinance No. 082, 2024. The cap that is left is not zero: the statute still allows limits based on building and fire code, and Fort Collins keeps adopting International Code Council standards, so bedroom egress, minimum room area, and septic or wastewater capacity still set the real ceiling on heads per house. Underwrite a student rental against current code capacity, not against the old three-unrelated rule.

On a single lease against a typical Fort Collins value, it runs tight, which is why most local DSCR files aren't built that way. Zillow's June 2026 mid-tier value and rent index for Fort Collins city work out to roughly a 4.1% gross yield, our arithmetic on their published figures, and that does not clear a DSCR test at ordinary bridge pricing on a whole-house lease. Investors here typically reach for one of three levers instead: per-bedroom leasing to Colorado State University's student population, now unconstrained by the old occupancy cap; a lower entry basis in the wider metro, where Greeley and Loveland pencil to a higher gross yield on the same math; or a licensed short-term rental in a zone that allows one. None of this is a promise about your specific deal; run your own numbers on the actual rent roll.

The base tax is low by national standards, but a metro district can more than double it. That line is easy to miss on a listing sheet. On a $500,000 Fort Collins rental with no metro district overlay, the certified tax-year-2024 levy stack works out to about $3,228 a year, or roughly 0.65% of value, our arithmetic on the Larimer County Assessor's abstract. Many Fort Collins-area subdivisions sit inside a metro district that layers an additional mill levy on top, and Larimer County's metro districts collectively certified more property tax revenue in tax year 2024 than every city and town in the county combined. A 60-mill district adds roughly $1,875 a year to that same house, pushing the total to about 1.0% of value, and the heaviest districts in the county push it higher still. Pull the parcel's actual tax area from the Larimer or Weld County assessor before you size the loan, not from the listing.

Yes, since January 1, 2025, and it is a small but real closing-checklist item, not an underwriting obstacle. Most long-term rentals inside the city, leases of 30 days or more, must be registered with the City of Fort Collins; owner-occupied rentals and mobile home park units are exempt. The fee is $37 per property plus $10 per additional unit on the same property, and no inspection is required as part of registration. The city moved from an education phase to enforcement in early 2025, so a Fort Collins rental purchased on a DSCR loan should be registered at or shortly after closing.

Budget for hail, not wildfire, unless the property sits in the foothills. Along Colorado's Front Range, including Larimer County, hail drives roughly half of homeowners premium, and roof age and roof class are what move the quote, with percentage-based wind and hail deductibles common. Require replacement-cost, not actual-cash-value, coverage on any DSCR collateral. Wildfire exposure in this metro is real but geographically narrow: the 2020 Cameron Peak Fire burned in the Poudre Canyon corridor west of the city, and that risk concentrates in foothills-and-canyon addresses like Estes Park, Red Feather Lakes, and Livermore, not in-town Fort Collins, Loveland, or Windsor, which sit on flat, irrigated plain.

It can, if the address already carries or can get the right kind of license. That license is worth checking before you underwrite the rent. Fort Collins splits short-term rentals into primary (owner occupies at least 9 months a year) and non-primary (owner does not occupy), and each type is only allowed in specific zones; the city keeps the controlling zoning map on its open data portal. A non-primary license costs $150 to start and $100 a year to renew, plus separate sales and lodging tax on the stay. The detail that catches buyers off guard: a Fort Collins STR license does not convey with the property on sale, so a purchase priced on an existing license's cash flow needs the new owner's own application, filed within 30 days of closing, before that income is real. If the property needs work before it can rent at all, our fix and flip loan can fund the acquisition and rehab first, with a DSCR refinance behind it qualifying on the finished property's rent.

Plan on at least 20% of the purchase price. Leverage runs up to 80% LTV, so on a $500,000 Fort Collins rental that is up to $400,000 from us and $100,000 from you (500,000 x 80% = 400,000). Two local lines belong in that same budget: the city's $37 rental registration on a long-term lease, and the parcel's actual tax area, since a metro district levy can push the annual tax from roughly 0.65% of value to about 1.0%. Pull the tax area before you size the down payment, not from the listing sheet. Subject to underwriting.

From $100,000 to $3 million. The floor matters here more than the ceiling: it puts a lower-basis ring-city purchase, where Greeley and Loveland pencil to a higher gross yield than Fort Collins city does, comfortably inside the program rather than under it. Terms run 30-year fixed or a 5, 7 or 10-year ARM, and DSCR starts at 0.75, which is what makes a per-bedroom student lease near Colorado State workable where a single whole-house lease often is not. Subject to underwriting.

640 is the floor on this program, so right around it is the conversation to have early. DSCR files start at 640, and there is no hard credit pull to get an answer. If you land under it, the asset-based side of our book is the alternative: a fix and flip or bridge loan carries no minimum score at all, and weaker credit there is usually offset with lower leverage rather than a decline. Either way we qualify the property's rent, not your tax returns. Subject to underwriting.