VA Loans Colorado
Colorado homebuyers who have proudly served in the armed forces have a great advantage — a VA home loan. Enjoy lower interest rates, no down payment requirement, and high loan limits when you work with District Lending on a VA loan!
VA loans work through a partnership between private lenders and the US Department of Veterans Affairs. This allows lenders like District Lending to offer highly advantageous interest rate options and waive down payment requirements, making it easier than ever for service members to find their Colorado dream home. If you’re ready to explore a VA loan in Colorado Springs, Denver, Boulder, or a smaller metro area, District Lending is here for you!
Colorado VA Home Loans
Approximately 340,000 veterans live in the Rocky Mountain State, with thousands of active duty service members and their families residing around the seven military bases in the state. Last year, 11,512 eligible military members used $5.5 billion in funding from the federal government to purchase homes here, and the average VA loan is around $480,000. Most of these were in El Paso County, which has 20% of the state’s total veteran population.
If you’d like to join the thousands of Coloradans who have benefited from VA mortgage programs, District Lending is ready to help. We’ll guide you through the entire VA loan process from start to finish, from the Certificate of Eligibility to the purchase agreement.
There are also state-level services just for veterans, which include Colorado Housing and Finance Authority’s FirstStep and FirstStep Plus products. This program provides low-cost second mortgages to assist with a down payment to reduce your overall payments, as well as assistance with closing costs.
What You Need to Know About Colorado VA Loans
Veterans and service members appreciate the VA program because it has competitive interest rates, a low minimum credit score, and no down payment amount required, which significantly reduces the cost of the home-buying process. VA loans work slightly differently than other mortgage products, so it’s important to understand all their elements.
Funding Fees
At the time of your home purchase, you’ll pay closing costs and a VA funding fee. This helps to fund the program and reduces the burden on the average taxpayer of the program, as the government has to partially reimburse the lender if you fail to pay your mortgage. You will also need to pay for a VA appraisal, which ranges from $800 to $950 in Colorado.
Loan Eligibility
Unlike a non-VA loan, these home loans can only be used for a primary residence, not an investment property. You will need to be an active service member, an honorably discharged veteran, or a surviving spouse of a qualified service member, which will be determined by a Certificate of Eligibility.
Loan Insurance
You will not need to pay for private mortgage insurance. This is very convenient as the average Colorado resident has to pay between 0.5% and 1% of the total loan amount through a mortgage insurance monthly payment. Homeowners’ insurance is not required by law in Colorado, but your lender may require it anyway.
Loan Interest Rates
Those with VA loans enjoy cheaper loan payments due to a more competitive interest rate. For comparison, if the typical Coloradan has a rate of 7.56% on a 30-year fixed-rate loan term, a VA loan recipient would have about 7%, though rates vary.
Qualified disabled veterans with 100% disability status can also save money through a property tax exemption, which counts toward the first $200,000 of their property value. As property taxes have risen steadily throughout Colorado in the past few years, this is an incredibly helpful perk of VA loans for certain veterans.
How to Know if You Qualify for a VA Loan in Colorado
VA loan requirements have two parts: service stipulations from the VA loan program itself, and the requirements of the particular lender you'll be working with. In addition to working with us, every Colorado county has a Veterans Service Office that can assist you with gathering your paperwork and determining your eligibility.
Duty Status
A VA home loan has specific length of service requirements, which include:
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Active duty members – 90 days of continuous active duty service
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National Guard members – 6 years of duty
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Veterans – 90 days of continuous active duty in wartime or 180 in peacetime
Those with a service-related injury can have served for less time. Surviving spouses cannot have remarried and must have lost their spouse as a result of service injuries.
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VA Entitlement
First-time borrowers usually have a full entitlement, meaning they can borrow as much as they need to without limit. Those with an existing mortgage through the program will have a partial VA loan entitlement. They can get a loan up to the Colorado VA loan limits for their remaining entitlement.
The VA loan limit is $787,750 for most counties, but some loan limits are higher. Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park counties have VA loan limits of $816,500. Eagle County has a limit of $1,075,250. Most loans will not be at the limit.
Discharge Status
You cannot get a VA home loan if you received a dishonorable, less-than-honorable, or bad conduct discharge. Only those who left on good terms with the military, whether that is due to hardship, government convenience, or a medical condition, can get a Certificate of Eligibility.
Decent Credit Score
Turning to the economic factors, you will need to supply credit information to the lender. VA loans require a credit score of 580, which is lower than conventional loans. However, some lenders may have different credit score requirements, so you will need to discuss this with each lender.
Low Debt-to-Income Ratio
The average VA loan recipient has a debt-to-income ratio of 41%, meaning that only 41% of their paycheck goes to other debt service. Some lenders will accept slightly higher, but you should try to be at or below this threshold.
Waiting Period
VA loans allow you to refinance your current mortgage. You can use this to tap into a home’s equity or access lower interest rates, but there is a seasoning requirement. At least 210 days need to pass from the time of closing to when you seek out a refinance loan in Colorado. You need to wait three to four years between loans.
District Lending is Your Colorado VA Loan Partner
Colorado VA loans are the best way to leverage your service for a brighter future. Whether you served at Buckley Air Force Base or were stationed overseas, we’re here to help you purchase the beautiful Rocky Mountain home of your dreams.
When you work with us, you receive customized service. Our loan officers will explain everything to you, such as VA loan limits and how to qualify. We’re also happy to assist you with your refinance loan needs. You’ll get a loan team for life. If you’re ready to get started, contact us today and experience the District Lending difference for yourself.
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