Are Prepayment Penalties Allowed on DSCR Loans in Colorado?

[Robin Simon]

Prepayment Penalty Rules for DSCR Loans in Colorado

Prepayment Penalties are Fully Allowed with Disclosure Requirements for DSCR Loans in Colorado. Under Colo. Rev. Stat. § 5-3.5-102(1)(g)(III), there are no restrictions on prepayment penalty options offered, however, DSCR Lenders must provide a written Loan Product Choice Disclosure to borrowers, clearly stating whether the loan includes a prepayment penalty and confirming the borrower’s selection. As such, as long as the required disclosure is included in the loan document package, DSCR Lenders can typically offer all standard prepayment penalty options such as Descending Prepay Penalties (i.e. “5/4/3/2/1”), Flat Prepay (i.e. 5/5/5) or other tailored structures in the Centennial State.

FULL Complete 2026 Guide To DSCR Loan Prepayment Penalties

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