How do VA loans work in Colorado?

There are hundreds of Colorado VA lenders. VA loans are the best mortgage loan program in the nation with 100% financing with no down payment required on a home purchase. Closing costs can be covered by the home seller with a seller concession towards the buyer’s closing costs. However, not every Colorado VA lender has the same VA loan requirements. Most Colorado VA lenders have two different types of guidelines. In this blog, we will discuss the recent VA changes, a few facts about the state of Colorado, and how to apply for a VA loan with Capital Lending Network, Inc. NMLS 1657322.


Colorado VA Lenders Need To Meet The Minimum Agency Mortgage Guidelines Of The U.S. Veterans Administration

Colorado VA Lenders Mortgage

The first lending guideline Colorado VA lenders need to follow is the agency mortgage guidelines by the Veterans Administration.  Individual lenders can have their own lender overlays. Lender overlays are higher lending requirements that are above and beyond the minimum VA agency mortgage guidelines. The higher lending requirements imposed by individual mortgage companies are called lender overlays.

UPDATED Colorado VA Loan Requirements

VA mortgage lending is an excellent tool to buy or refinance your primary residence.  Capital Lending Network, Inc. are experts in all areas of VA mortgage lending. There have been some recent changes to VA mortgage lending that we will discuss in this article. Capital Lending Network, Inc. also has a strong presence throughout the state of Colorado.


How To Apply For A VA Loan With Colorado VA Lenders

We have been licensed in Colorado for a few years and are able to help many veterans in the area. Applying for a VA loan is easy and streamlined. All Colorado VA lenders have a similar VA loan application process. VA loan applications with a lender in Colorado are normally done by the borrower applying online on the lender’s secured website.

Documents Required By Mortgage Lenders To Start The Mortgage Process

Borrowers will be asked to provide certain documents for the mortgage loan application process. Common mortgage documents needed to start the mortgage qualification and pre-approval process are the following paperwork and documents:

  • Two years income tax returns
  • W2s for the past two years
  • 30 days paycheck stubs
  • 60 days bank statements
  • Asset and liabilities documents
  • Copy of drivers license and social security card

Letter Of Explanations

Letters of explanations for questionable potential questions the mortgage underwriter.

The loan officer may require letter of explanations on the following conditions:

  • Credit inquiries
  • Derogatory credit tradelines
  • Collection accounts
  • Bankruptcy and/or foreclosure if applicable
  • Gaps in employment
  • Irregular income
  • Overdrafts in bank accounts and/or irregular bank deposits
  • Other issues the underwriter may need clarification and/or further detailed explanations

Once the VA loan application is completed, the loan officer will go over line item per line item and ask you questions on things the loan officer is not clear on so there are no misunderstandings.


Colorado VA Lenders VA Loan Application Mortgage Process

Once the application is complete and the information is verified, the loan officer will qualify the borrower through various steps. A tri-merger credit report will be pulled. The loan officer will run the VA loan application and tri-merger credit report through either Fannie Mae and/or Freddie Mac’s automated underwriting system.

The Importance Of The Automated Underwriting System Approval During The Qualification And Pre-Approval Process

Automated Underwriting System Approval During The Qualification And Pre-Approval Process

The automated findings everyone is hoping for approve/eligible per AUS. With an AUS-Approval, the loan officer will need to make sure the borrower meet’s the loan officer’s employer’s lender overlay guidelines. If the borrower meets the agency guidelines and all of the mortgage company’s lender overlays, the loan officer will issue a pre-approval letter to the borrower.

Shopping For A Home And Executed Real Estate Purchase Contract

With the pre-approval letter, the borrower can start shopping for a home. Most homebuyers will hire a buyer’s real estate agent. Once the buyer decides they found the home of their dreams, they will make a purchase offer. The negotiation phase begins and once the buyer and seller agree on the price and term, both parties sign the real estate purchase contract. With the executed real estate purchase contract, the mortgage process begins.

Buying A Home In Colorado

Colorado is growing in population and has been for nearly a decade. Colorado has seen mass migration from numerous states such as New York, Illinois (Chicago), and California. Many Colorado natives will tell you the state is currently overpopulated.


Reasons Why Many People Migrate To Colorado

There are numerous reasons Americans are attracted to the state of Colorado. For example, the city of Denver has an average of 300 days or more of sunshine per year which is more than Miami or San Diego. Denver is nicknamed the mile high city because it is exactly one mile (5280 feet) above sea level. Denver is also home to all four major sports including the NFL (Broncos), MLB (Rockies), NHL (Avalanche), and NBA (Nuggets).

Majestic Mountain View

As you get outside of Denver and continue to head west there are the Rocky Mountains. The mountainous area of Colorado is six times the size of Switzerland and has plentiful fishing including over 2850 lakes and well over 1000 mountain peaks. The United States has a total of 91 mountains with an elevation above 14,000 feet often referred to as “fourteeners” and 56 of those are in Colorado. Colorado also is part of the four corners where Arizona, New Mexico, and Utah meet. If you are into hiking and outdoor sports, this is a great state to live in.

Growing Population Of Active Duty And Retired Members Of The U.S. Military

The military community in Colorado is very strong. The Colorado Springs area has five military institutions including the United States Air Force Academy, Cheyenne Mountain Air Force stations, Fort Carson‘s Army Post, Patterson Air Force Base, and Chevy Air Force Base. This area is home to more than 53,000 military veterans. There is also a strong presence from companies such as Lockheed Martin. Many Coloradoans enjoy an active lifestyle, so this is a great place for our nation’s veterans. 


VA Loan Requirements Update On Maximum Loan Limit On VA Loans

Maximum Loan Limit On VA Loans

The latest change for VA mortgage lending will start on January 1, 2020. The new change will be applied to all VA mortgage loans after the new year. You may have already heard the conforming loan limits for 2022 have increased dramatically. In 2021, the conforming loan limit was $548,250, and in 2022 we are going to see that number jump all the way to $627,200. This is one of the largest single-year jumps of all time. Why does this jump matter to VA veterans? If you have lost part of your entitlement in the past, this change can significantly increase how much entitlement you have remaining.

The Importance Of The VA Entitlement On VA Loans

VA entitlement – VA entitlement is very important when qualifying for a VA mortgage loan. Your entitlement is the dollar amount the VA will ensure and re-pay your lender in the scenario of default. A lender will lend four times the amount of entitlement available. This means the VA will guarantee 25% of the outstanding balance. Entitlement will change based on your county’s conforming loan limit. With the increase conforming loan limits for 2022, the veteran with damaged or partial entitlement will be able to purchase a higher-priced home without a down payment. We understand VA entitlement can be quite confusing. Please call our team at Capital Lending Network, Inc. on 630-659-7644 for more information on VA entitlement.


VA Loans Does Not Have A Maximum Loan Limit

Besides the change in entitlement, VA mortgage lending has not changed much over the past few years due to the Bluewater Navy Vietnam Veterans Act of 2019 signed into law by then-President Donald Trump. This act removed loan limits for VA mortgage lending. Just a few years back, if you were to buy a house over the conforming loan limit, you needed a down payment. You would need a down payment in the amount of 25% of the difference between the conforming loan limit and the purchase price of your home. This could add up quickly. Many veterans have taken advantage of the elimination of VA loan limits.

VA Loans Benefit Homebuyers In A Booming Housing Market Due To No Cap In The VA Loan Limit

Assuming you have enough entitlement, a qualifying credit profile, and your debt-to-income ratio can support a higher amount, you could buy a multi-million dollar house without a down payment. The Bluewater Navy Vietnam Veterans Act of 2019 has helped many veterans enter the housing market in higher-priced areas such as the Denver market! Veterans in Colorado know how pricey homes have become in the area. So having the ability to increase their offer price without a down payment is extremely helpful. 


VA Credit Score Requirements On VA Loans

There is a lot of confusing information on the Internet surrounding VA mortgage lending. Most mortgage lenders have lender overlays on their VA mortgage programs. If you have a troubled credit score, you may have applied with a lender who may not be able to assist you. Many banks have minimum credit score requirements of 620 or even 640 for VA mortgage lending. Lender overlays increased dramatically during the COVID-19 coronavirus outbreak. CLN do not have any lender overlays on their VA mortgage programs. This allows us to help more families than most mortgage companies. We are experts in manual underwriting and one-off scenarios. We only use HUD guidelines spelled out for VA lending and nothing additional.

The VA Loan Mortgage Process

Applying for a VA mortgage loan with CLN is a very simple process. First, you want to call the VA expert, Mike Gracz, on 630-659-7644. If you have a hectic schedule, you may also email  You will discuss your scenario or set up an appointment with Mike Gracz. After discussing your credit, asset qualifications, and entitlement, Mike will pair you with a licensed loan officer in your state. You will then fill out a straightforward online mortgage application. After the application is completed, your loan officer will now have permission to verify your credit report and calculate all of your income based on the information provided. You will then receive a pre-approval letter or a fully customized plan for the steps to take to qualify as soon as possible.


The Best Colorado VA Lenders To Use For Your Home Purchase And Your VA Loan Process

Colorado VA Lenders To Use For Your Home Purchase And Your VA Loan Process

Why use CLNfor your VA mortgage loan? As stated above, we do not have lender overlays. We go only off the U.S. Department of Housing and Urban Development guidelines for VA mortgage lending. Our underwriting staff is experts with these guidelines. We are able to help veterans who are in an active chapter 13 bankruptcy or less than two years discharged from an active chapter 13 bankruptcy. We are highly competitive in the VA mortgage lending market. An overlay could be the difference between you buying or renting a home for you and your family.

Why Use Capital Lending Network, Inc.:  Colorado VA Lenders With No Lender Overlays

We encourage you to reach out to our highly skilled mortgage team today. The housing market is incredibly competitive in the state of Colorado. Colorado has seen some of the largest appreciation in history and we want our veterans to be able to purchase a house without a down payment. Homes have increased about 20% in value in the past year and are expected to continue to increase. I have asked realtors when the best time to buy a home in Colorado is, and received a one-word answer, “yesterday”. This was a joke but reiterated the values are continuing to increase so entering the housing market sooner than later is a good idea. 

We are available seven days a week and work as a team to help you and your family achieve homeownership. For any VA mortgage-related questions please give Mike Gracz a phone call on 800-900-8569 or send an email to=  . Thank you for serving our country and we look forward to serving your family.


Michael Gracz NMLS 1160212 is a veteran mortgage loan officer at Nexa Mortgage LLC. Mike can help borrowers with less than perfect credit and higher debt-to-income ratios. Due to Nexa Mortgage being a no overlay lender on government and FHA Loans, Mike can structure any less than perfect borrowers' files and help them qualify for a home loan in a matter of a short time. It is not if you can qualify for a mortgage with Mike but when. Mike Gracz can be reached at 630-659-7644 or email at

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