Colorado Second Home Loans and Mortgage Solutions

Frequently Asked Questions

What are the requirements for a second home loan, and how does Colorado define second homes?

Colorado follows conventional lending guidelines for second homes. The property must be a one-unit residence, suitable for year-round living, and personally occupied by the borrower for part of the year. BNB Lending typically requires a 10–20% down payment, qualifying credit, and stable income. There are no state-specific occupancy or distance requirements beyond lender standards. If you plan to rent the property part-time, it may still qualify under second home terms. We’ll assess your Colorado property's location and intended use to recommend the best loan type for your needs.

How do Colorado short-term rental laws affect second home financing?

Colorado’s STR laws allow up to 120 days of rental without commercial zoning, but that depends on local ordinances. Cities and counties manage licensing and enforcement, and state lodging taxes apply. If your second home in Colorado will be used occasionally for STR income, it may still qualify for second home financing. However, frequent rental use could trigger a reclassification. BNB Lending helps you navigate your property’s zoning, STR limits, and usage so we can structure your loan accordingly. Understanding these rules helps avoid surprises during underwriting.

Do Colorado second homes qualify for property tax exemptions or special rates?

Colorado taxes second homes used exclusively for personal use at the standard residential rate (around 7%). If the home operates frequently as a short-term rental, it could be reclassified and taxed at a higher lodging property rate—up to 29% in some jurisdictions. These classifications depend on county-level assessments and reported use. At BNB Lending, we work with you to estimate tax impact on your Colorado second home before finalizing the loan. Accurately anticipating property taxes helps protect your budget and long-term return on investment.

Can I deduct mortgage interest on a Colorado second home?

Mortgage interest on a Colorado second home may qualify for federal deductions if you itemize and stay within IRS caps. Unlike many states, Colorado allows additional state-level deductions and offsets that can reduce your taxable income. If the property also earns short-term rental income, part of the interest may be deductible as a business expense. At BNB Lending, we help you structure financing that supports tax efficiency. We recommend working with a CPA familiar with both federal and Colorado-specific tax treatment for vacation properties.

Are there second home loan programs available in Colorado?

Colorado Housing and Finance Authority (CHFA) programs focus solely on primary residences and first-time homebuyers. There are no state-sponsored second home mortgage programs. That’s where BNB Lending comes in—we offer private second home loans throughout Colorado, including in popular markets like Vail, Breckenridge, and Estes Park. With flexible terms and streamlined approvals, we help you finance your ideal vacation property without needing a state-backed program. Whether it’s personal use or occasional STR income, we’re here to structure the right solution.

What types of properties qualify for second home loans in Colorado?

BNB Lending finances Colorado second homes including mountain cabins, single-family homes, townhomes, condos, and even small multi-unit properties where the borrower occupies one unit part-time. The property must be usable year-round and intended primarily for personal use. In ski towns or resort areas, zoning and HOA rules may impact eligibility for STRs. We help you evaluate each Colorado property’s compliance with lender and local requirements so your financing process remains smooth and aligned with your goals.

Who should consider second home financing in Colorado instead of an investment loan?

If your Colorado property will be used seasonally and only occasionally rented, a second home loan likely offers better rates and lower down payments than investment financing. These loans require the home to be titled in your personal name, not an LLC. At BNB Lending, we help remote workers, retirees, and part-time residents get flexible loan options designed for lifestyle and value. Our team structures second home loans that align with your Colorado property’s use while keeping financing compliant with lending guidelines.

Thinking beyond Colorado? Explore Airbnb loans and second home opportunities in nearby states like Utah or New Mexico to diversify your portfolio.