Telluride is one of the most active vacation rental markets in Colorado — and one of the most financially demanding to enter. A 3-bedroom Mountain Village condo with ski-in/ski-out access rents for $1,500–$4,000 per night during peak ski season and $500–$1,500/night during summer festival season (Telluride Bluegrass Festival draws 10,000 attendees over four days in June; the Telluride Film Festival brings another 8,000 in September). The ski resort averages 309 inches of annual snowfall. The festival calendar generates rental demand for 9+ months of the year.
That rental income is real and documentable. DSCR loans are built to capture it. Tayton Capital is headquartered in Telluride and processes DSCR loans in San Miguel County regularly. NMLS #2106875.
What Is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio. It's an investment property loan that qualifies based on the property's rental income rather than your personal income. No W-2s, no personal tax returns, no business tax returns.
Formula: Gross Monthly Rental Income ÷ PITI (Principal + Interest + Taxes + Insurance + HOA) = DSCR ratio
A ratio of 1.0x means rental income exactly covers the payment. Most lenders require 1.0x–1.25x. Some allow ratios below 1.0x for strong-credit borrowers with larger down payments. DSCR loans require 20–25% down, 660+ credit score, and documented rental income or a market rent schedule from the appraiser.
The Telluride DSCR Math
Mountain Village 2-bedroom ski condo, $1.8M purchase:
- 25% down: $450,000
- Loan amount: $1,350,000
- Rate (30-year fixed DSCR): ~7.5–8.0%
- P&I: ~$9,450–$9,950/month
- Taxes + insurance: ~$1,500/month
- Mountain Village HOA (ski condos): $800–$2,000/month
- Total PITI: ~$12,000–$13,500/month
Documented rental income estimate:
- Ski season (Dec–Mar): 60 nights × $1,800/night = $108,000
- Summer festivals (Jun–Aug): 30 nights × $900/night = $27,000
- Shoulder seasons: 40 nights × $500/night = $20,000
- Annual gross: ~$155,000 / 12 = ~$12,900/month
DSCR ratio: ~1.0x on a well-performing property. Properties with lower HOA fees or stronger occupancy histories produce stronger ratios. We review the specific property's projected income against PITI before recommending DSCR — if the math doesn't work, we'll tell you before you make an offer.
Who DSCR Is Right For in Telluride
Self-employed buyers whose tax return income doesn't reflect actual cash flow. LLC buyers — DSCR allows title to be held in an LLC; conventional investment loans do not. Out-of-state investors building a resort portfolio without income disclosure. High-net-worth buyers who prefer rental income qualification over personal income disclosure. Buyers who've already tapped their conventional investment property count (typically 10 financed properties).
Frequently Asked Questions
Can I buy a Telluride vacation rental through an LLC with DSCR?
Yes — DSCR is one of the few loan products that allows LLC ownership at closing. This is a significant advantage for investors who want liability protection and portfolio structuring. We work with lenders who handle San Miguel County LLCs routinely.
How does the lender document rental income for a Mountain Village property with no rental history?
An independent appraiser provides a market rent schedule — a formal estimate of projected rental income based on comparable Mountain Village and Telluride STR properties. The appraiser uses verified Airbnb and VRBO data for comparable properties. For existing rentals with documented history, actual income from your property manager or platform statements are used.
What credit score do I need for DSCR in Telluride?
Minimum 660 FICO for most DSCR lenders; 700+ gets better pricing. At Telluride loan amounts ($900K–$2M+), the rate differential between 680 and 740 credit is meaningful — work on your score before applying if it's in the 660–699 range.
Is DSCR the same as a second home loan?
No — and the distinction matters. Second home loans (10% down, conventional) are for properties you'll personally use and occasionally rent. DSCR is for properties you intend to rent primarily. Using a second home loan for a primarily-rented property is occupancy fraud. We structure deals correctly from day one.
Related: Mortgage broker in Telluride · DSCR loan overview · Jumbo loans in Telluride · DSCR Telluride 2026 guide