VA Loan Guide for Veterans in Colorado
Colorado offers veterans and active-duty service members a stunning mix of natural beauty and vibrant urban living.
Whether you’re looking to settle in bustling Denver, scenic Colorado Springs, or smaller mountain towns, VA loans make homeownership accessible and affordable.
These government-backed loans often require no down payment and offer lower interest rates, helping veterans achieve their homeownership dreams across Colorado’s diverse real estate market.
What are VA Loans?
VA loans are mortgage options offered through a program established by the U.S. Department of Veterans Affairs. They are designed to help eligible veterans, active-duty service members, and certain surviving spouses purchase homes. Because these loans are backed by the VA, lenders can provide favorable terms, including the possibility of obtaining a mortgage without a down payment, which helps buyers preserve their personal savings.
In addition, VA loans do not require private mortgage insurance (PMI), reducing the overall monthly payments for homeowners. They often feature competitive interest rates and more flexible credit requirements than conventional loans, making it easier for individuals to qualify. These benefits apply to various types of residential properties, as long as the borrower intends to use the home as their primary residence.
VA Loan Benefits
VA loans offer unique benefits that make them a great option for veterans, active-duty service members, and surviving spouses. These benefits include:
No Down Payment
The ability to buy a home with no down payment is the hallmark benefit of VA loans. Since its inception, this program has enabled qualified Veterans and service members to purchase homes without the burden of saving for a hefty down payment.
Unlike most conventional loans that require a down payment—often starting at 3% or more—VA loans eliminate this financial barrier. Saving for a down payment can take years for many military families, making this benefit a game-changer. For those who have the cash, opting for a VA loan allows them to allocate that money toward other investments or savings goals.
Lower Interest Rates
VA loans consistently offer some of the lowest average interest rates in the mortgage market, according to Optimal Blue data. For the past two years, VA loans have maintained this position, making them an attractive choice for Veterans.
A lower interest rate helps buyers save significantly over time, both in monthly payments and overall loan costs. It also increases purchasing power, allowing Veterans to qualify for larger loans with the same monthly budget.
Flexible Credit Guidelines
VA loans are designed to make homeownership accessible, especially for Veterans with less-than-perfect credit. They feature more forgiving credit standards compared to other loan programs.
While credit score requirements vary by lender, VA loans often accept scores lower than those required for conventional loans. At Veterans United, for instance, borrowers typically need a FICO score of 620. Additionally, VA loans offer flexibility with debt-to-income (DTI) ratios and shorter waiting periods after financial hardships like bankruptcy or foreclosure.
Closing Cost Limits
VA loans come with protections to limit the financial burden of closing costs. Lenders are restricted on how much they can charge Veterans for loan origination and processing.
Sellers in a VA loan transaction can cover all the buyer’s loan-related closing costs and provide up to 4% of the loan amount in concessions. Furthermore, certain fees and costs are prohibited from being charged to VA borrowers, further reducing out-of-pocket expenses.
No Private Mortgage Insurance
Conventional loans typically require private mortgage insurance (PMI) for borrowers who put down less than 20%, adding an ongoing monthly cost. FHA loans also come with upfront and monthly mortgage insurance premiums.
VA loans eliminate the need for PMI altogether, even with zero down payment. This not only saves Veterans money but also maximizes their purchasing power, enabling them to afford more home for their budget.
Lifetime Benefit
One of the most significant advantages of VA loans is that they are a lifetime benefit. Eligible Veterans, active-duty service members, and surviving spouses can use their VA loan benefits multiple times throughout their lives, provided they meet the eligibility criteria and have sufficient entitlement remaining.
Whether you’re buying your first home, upgrading to a larger property, or purchasing a vacation home, the VA loan program remains accessible. Even if you’ve defaulted on a previous VA loan, you may still regain eligibility after repaying the loan or restoring your entitlement. This flexibility ensures that your VA loan benefit can support your housing needs at every stage of life.
Colorado Veteran Programs by City
Denver Veteran Homebuyer Programs
Denver Housing Authority – HUD-VASH Program
- Connects veterans with rental housing and supportive services.
- Provides vouchers for affordable housing options.
- Offers case management and access to VA healthcare services.
Learn more about Denver HUD-VASH
Colorado Housing Assistance Corporation (CHAC)
- Offers down payment assistance loans to veterans in Denver.
- Includes homebuyer education programs to prepare veterans for ownership.
- Provides low-interest loans to reduce upfront costs.
Learn more about CHAC
Habitat for Humanity of Metro Denver – Veterans Program
- Helps veterans access affordable homeownership opportunities.
- Requires sweat equity contributions for home construction.
- Provides financial counseling and homebuyer education.
Learn more about Habitat for Humanity Denver
Colorado Springs Veteran Homebuyer Programs
Rocky Mountain Human Services – Homes for All Veterans (HAV)
- Offers assistance with housing stability for homeless or at-risk veterans.
- Provides case management and resources for long-term success.
- Focuses on maintaining affordable housing options.
Learn more about HAV
Pikes Peak Habitat for Humanity – Veterans Build Program
- Dedicated to providing veterans with affordable housing solutions.
- Includes sweat equity and homebuyer education for participants.
- Targets low-income veteran families in the Colorado Springs area.
Learn more about Pikes Peak Habitat
Mt. Carmel Veterans Service Center – Homebuyer Assistance
- Offers financial education and homebuying workshops for veterans.
- Connects veterans with VA loan experts and housing resources.
- Provides assistance with navigating local housing programs.
Learn more about Mt. Carmel Veterans Services
Aurora Veteran Homebuyer Programs
Aurora Housing Authority – Veterans Assistance Program
- Focuses on providing housing support to veterans and their families.
- Includes rental and homeownership options tailored to veteran needs.
- Offers access to case management and housing resources.
Learn more about Aurora Housing Authority
Access Housing – Veteran Services
- Assists veterans with transitional and permanent housing options.
- Provides financial planning and housing readiness programs.
- Focuses on stabilizing at-risk veterans in Aurora.
Learn more about Access Housing
Aurora Warms the Night – Veteran Housing Outreach
- Supports homeless veterans with emergency and transitional housing.
- Includes counseling and job placement assistance.
- Works to create pathways to permanent homeownership.
Learn more about Aurora Warms the Night
Fort Collins Veteran Homebuyer Programs
Neighbor to Neighbor (N2N) – Veteran Housing Assistance
- Offers down payment assistance and financial coaching for veterans.
- Includes foreclosure prevention counseling.
- Provides housing stability resources tailored for veteran families.
Learn more about N2N
Fort Collins Habitat for Humanity – Veterans Program
- Helps veteran families achieve affordable homeownership.
- Provides financial literacy training and sweat equity opportunities.
- Focuses on building safe, sustainable homes for veterans.
Learn more about Fort Collins Habitat
Homeward Alliance – Veteran Services
- Connects veterans with transitional and permanent housing options.
- Offers supportive services like employment and financial counseling.
- Focuses on creating long-term stability for veteran households.
Learn more about Homeward Alliance
Lakewood Veteran Homebuyer Programs
Lakewood Housing Authority – Veterans Housing Services
- Offers rental and homebuyer programs for veterans in Lakewood.
- Provides access to affordable housing options and case management.
- Includes partnerships with local VA resources.
Learn more about Lakewood Housing Authority
Jefferson Center for Mental Health – Veterans Housing Support
- Provides mental health and housing stability services for veterans.
- Includes financial counseling to prepare for homeownership.
- Focuses on integrating housing with supportive care.
Learn more about Jefferson Center
Habitat for Humanity of Metro Denver – Lakewood Projects
- Builds affordable housing for veterans in the Lakewood area.
- Requires sweat equity and offers homeownership education.
- Supports low-income veteran families.
Learn more about Habitat for Humanity Denver
VA Loan Eligibility Criteria
To qualify for a VA loan, applicants must meet the service and eligibility criteria set by the Department of Veterans Affairs.
- Veterans: Those who have met the required active-duty service and were discharged under conditions other than dishonorable.
- Active-duty service members: Current active-duty personnel are eligible to apply. National Guard and Reserve members: Must have completed six years of service or served a minimum of 90 days of active duty during wartime.
- Surviving spouses: Spouses of service members who died in the line of duty or from a service-related injury may qualify for VA loan benefits.
Here are the basic service time requirements:
- 90 consecutive days of active duty during wartime
- 181 consecutive days of active duty during peacetime
- 6 years of service in the National Guard or Reserves, or 90 days of active-duty service under Title 32 orders (with at least 30 consecutive days served)
VA Loan Eligibility Calculator
How to Obtain a Certificate of Eligibility (COE)
Securing a Certificate of Eligibility (COE) is a vital first step in qualifying for a VA loan. This document verifies that you meet the service criteria established by the Department of Veterans Affairs.
Ways to Apply:
- Online: Use the VA’s eBenefits portal for the fastest application process.
- Through a Lender: Many VA-approved lenders can request your COE electronically.
- By Mail: Submit VA Form 26-1880 to the VA office, though this method takes longer.
Required Documents:
- Veterans: DD Form 214 detailing service history and discharge status.
- Active-Duty Service Members: A statement of service from your personnel office.
- National Guard/Reserve: Points statements and service proof if never activated.
- Surviving Spouses: Marriage license and death certificate of the veteran may be required.
Colorado Housing Market Overview
Colorado’s real estate market offers diverse opportunities for homebuyers, from urban metro areas to serene mountain towns. While housing costs vary, veterans using VA loans can benefit from no down payment, no private mortgage insurance, and competitive interest rates. These perks make homeownership more feasible despite rising property values.
| City | Average Home Price | Estimated Monthly VA Loan Payment | Average Property Tax/Year |
|---|---|---|---|
| Denver | $600,000 | ~$3,600 | ~$3,000 |
| Colorado Springs | $450,000 | ~$2,700 | ~$2,250 |
| Aurora | $500,000 | ~$3,000 | ~$2,500 |
| Fort Collins | $550,000 | ~$3,300 | ~$2,750 |
| Lakewood | $480,000 | ~$2,880 | ~$2,400 |
Colorado VA Loan Limit
$766,550
Veterans with full entitlement can borrow as much as a lender approves without a down payment. For veterans with partial entitlement, loan limits may apply based on local property values.
For veterans with full VA entitlement in Colorado, there’s no limit to how much they can borrow without a down payment, subject to lender approval. The VA has removed county-specific loan limits for borrowers with full entitlement, offering greater flexibility. However, veterans with partial entitlement may encounter restrictions based on local property values. Given Colorado’s diverse housing market, from urban areas like Denver to rural mountain communities, consulting with a lender is crucial to understanding how entitlement and property values affect borrowing capacity.
Colorado Property Tax Exemptions for Disabled Veterans
Colorado offers significant property tax exemptions for disabled veterans, helping to reduce annual housing costs. The benefits are determined by the veteran’s disability rating, with eligible veterans potentially eliminating or significantly reducing their property tax burden. These exemptions can greatly improve housing affordability and financial stability. For more information or to apply, veterans should contact their local county assessor’s office or the Colorado Department of Military and Veterans Affairs. Taking advantage of these exemptions ensures a more manageable path to homeownership.
Types of VA Loans
VA Purchase Loan
The VA Purchase Loan helps eligible borrowers buy homes with no down payment, reduced interest rates, and no private mortgage insurance. This loan applies to various property types, including single-family homes, condos, and multi-unit residences.• Removes the barrier of a large upfront down payment• Offers lower interest rates compared to conventional loans• Applies to different property types, as long as it’s a primary residence
Interest Rate Reduction Refinance Loan (IRRRL)
The IRRRL, also known as the VA Streamline Refinance, allows veterans to refinance their existing VA loans with minimal paperwork and no appraisal in many cases. It reduces interest rates or monthly payments.• Simplifies refinancing to lower monthly costs• Requires little documentation, expediting the process• Enables rolling closing costs into the loan to reduce upfront payments
Cash-Out Refinance Loan
Cash-out refinancing lets veterans access their home equity for major expenses, such as renovations, debt consolidation, or emergencies. It can refinance both VA and non-VA loans.• Unlocks equity to fund large financial needs• Helps manage costs for home improvements or emergencies• Replaces both VA and conventional mortgages, broadening refinancing options
Native American Direct Loan (NADL)
The NADL assists Native American veterans or veterans married to Native Americans with purchasing, building, or improving homes on federal trust land.• Specially designed for homeownership on federal trust land• No down payment requirement to ease financial strain• Offers competitive rates and lower closing costs
Rehabilitation and Renovation Loan
This VA-backed loan integrates home improvement costs into the mortgage, simplifying financing for repairs or upgrades.• Consolidates renovation costs with the mortgage for simplicity• Helps protect or increase the property’s value• Supports both essential repairs and modernization projects
Energy Efficient Mortgage (EEM)
EEM loans finance energy-saving upgrades, such as solar panels, new HVAC systems, or better insulation, to lower utility bills and promote sustainability.• Funds upgrades that reduce energy consumption and costs• Easily combined with other VA loans for seamless improvements• Encourages eco-friendly living with long-term savings
Colorado Housing Programs for Veterans
Colorado Housing Assistance Corporation (CHAC)
- CHAC provides down payment assistance loans to low- and moderate-income homebuyers, including veterans.
- Offers second mortgage loans to cover down payments
- Supports credit counseling and homebuyer education
- Helps bridge the financial gap for first-time homebuyers
- Learn More About CHAC
Veterans Affordable Housing Program – Habitat for Humanity Colorado
- This program helps veterans access affordable homeownership through sweat equity and financial guidance.
- Builds affordable, high-quality homes for veterans
- Requires participation in financial literacy programs
- Promotes long-term stability through homeownership
- Explore Habitat for Humanity Colorado
Colorado Housing and Finance Authority (CHFA)
- CHFA offers mortgage credit certificates and affordable loan programs for veterans purchasing their first homes or refinancing.
- Provides tax credits on mortgage interest payments
- Offers down payment assistance grants or second loans
- Works in tandem with VA loans for additional savings
- Discover CHFA Program
Frequently Asked Questions
What is a VA loan, and who qualifies for it?
A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs. It is available to eligible veterans, active-duty service members, and certain surviving spouses. Borrowers must meet service requirements and obtain a Certificate of Eligibility (COE) to qualify.
Do VA loans require a down payment?
Most VA loans do not require a down payment, making them an excellent option for buyers looking to minimize upfront costs. This feature helps veterans and service members purchase homes more affordably.
Are there credit score requirements for VA loans?
While the VA does not set a minimum credit score, most lenders prefer a score of 620 or higher. Some lenders may offer flexibility for borrowers with lower scores based on their overall financial profile.
Can VA loans be used for investment properties?
No, VA loans are intended for primary residences only. Borrowers must occupy the home as their primary residence to qualify for this benefit.
How does a VA loan differ from a conventional loan?
VA loans offer benefits like no down payment, no private mortgage insurance, and more lenient credit requirements. These features make VA loans more accessible and cost-effective for eligible borrowers compared to conventional loans.
What is the VA loan entitlement?
Entitlement is the amount the VA guarantees to lenders on behalf of the borrower. Full entitlement allows borrowers to buy homes with no loan limits, while partial entitlement may impose limits based on prior VA loan usage.
Can I use a VA loan to refinance my mortgage?
Yes, VA loans can be used to refinance existing mortgages through options like the Interest Rate Reduction Refinance Loan (IRRRL) or a cash-out refinance. These programs help lower payments or access home equity.
Are VA loans only for single-family homes?
No, VA loans can be used for various property types, including single-family homes, condos in VA-approved developments, and multi-unit properties (up to four units), provided the borrower lives in one unit as their primary residence.
What costs are involved with a VA loan?
VA loans include a funding fee, which varies based on the borrower’s service history and loan type. Closing costs are also applicable, but these are capped and often lower than conventional loans.
Do disabled veterans get additional VA loan benefits?
Yes, disabled veterans may be exempt from paying the VA funding fee and may qualify for property tax exemptions in many states, helping reduce overall homeownership costs.