Colorado VA Lenders For Bad Credit With No Lender Overlays
In this article, we will cover and discuss qualifying for a VA loan with low credit scores with Colorado VA lenders with no overlays for bad credit. The Department of Veterans Affairs administers the VA loans Colorado credit and debt to income ratio requirements and guidelines. In this article, we will cover Colorado VA lenders with no overlays for bad credit, credit scores, and debt to income ratio on VA loans. There are two sets of mortgage guidelines on VA home loans.
Do All VA Lenders Have The Same VA Loan Requirements in Colorado?
Not all VA lenders have the same VA loan requirements. One lender may have a higher credit score requirement while another lender will not even have a minimum credit score requirement. Just because you were denied a VA loan from a lender does not mean you cannot qualify and get approved by a different lender. The agency guidelines from the Veterans Administration on VA loans, and the second type of mortgage guidelines are the lender overlays. The Veterans administration has lenient mortgage guidelines on VA loans. In the following paragraphs, we will cover and discuss qualifying for VA loans with no lender overlays. Borrowers with less than perfect credit who have been denied a VA home loan can qualify and get approved with Colorado VA lenders with no overlays for bad credit.
VA Loan Credit Score Requirements in Colorado
Gustan Cho Associates gets countless calls from our viewers and borrowers of VA loans and questions about the conflicting answers they get from various Colorado VA lenders about the actual VA loan requirements in Colorado. Many Colorado VA lenders are telling borrowers the minimum credit scores are 620 and others are being told the VA credit score requirements are 640 FICO. It is not just the VA loan requirements on credit scores, but many borrowers are getting conflicting reports about the debt to income ratio requirements. The key in getting approved for VA home loans with bad credit is to have the help of Colorado VA lenders with no overlays on VA loans.
What Is The Lowest Credit Score You Can Have To Get a VA Loan in Colorado?
How Can I Get Approved For a VA Loan With Bad Credit in Colorado?
500 Credit Score Approval With Colorado VA Lenders With No Overlays
Home prices in Colorado are pricier than in other states. However, Colorado has one of the lowest property states in the nation. Data show Colorado’s population is skyrocketing due to low cost of living, low property taxes, great scenery, beautiful landscape, majestic mountains, countless places of entertainment, beautiful summers and winters, a growing economy, and abundant job opportunities. Average wages are higher than the median wages and skilled workers have no problem landing the job of their dreams.
Best Colorado VA Lenders With No Overlays For Poor Credit
The state of Colorado is one of the fastest-growing states in the nation. Eligible active duty and retired members of the U.S. Military can qualify for VA home loans in Colorado with credit scores down to 500 FICO. The key to getting a VA loan approved with bad credit is to have Colorado VA lenders with no overlays to help you. There are no minimum credit score requirements on VA loans. As long as you have been timely in the past 12 months on all of your payments and have the income, you should get an approve/eligible per the automated underwriting system.
How Long Does a VA Loan Pre-Approval Take?
Homebuyers can get a rock-solid pre-approval within a few hours. Getting a qualified pre-approval requires teamwork and cooperation by the borrower. Homes in Colorado are getting under contract soon after it gets listed so putting an offer in with an updated pre-approval is very important. The real estate market is appreciating year after year in many counties of Colorado. Tens of thousands of individuals and businesses are migrating to Colorado more than any other state. Thousands of taxpayers are fleeing high-taxed states with poor economies and high taxes to Colorado. Colorado has higher than average home prices but the property taxes are a fraction of the national median property tax rates of other states. The demand for housing in Colorado has never been stronger. The strong demand versus a shortage of available homes is creating somewhat of an issue for homebuyers. Many homebuyers are buying homes over the list price. This was the case in early 2021. However, the craziness of buying homes over the list price has stabilized. The Colorado housing market is still competitive but not like it was in late 2020 and the first half of 2021.
Current VA Home Loan Rates in Colorado
Mortgage rates have been volatile and are over 5.0%. However, Gustan Cho Associates can offer the most competitive rates for our veterans on their home purchase. Homebuyers migrating to Colorado are buying versus renting homes. They rather purchase a home and settle down and not mess with renting a home and moving again to purchase a home. VA loans do not require a down payment. Lenders allow 100% financing on VA loans with no mortgage insurance premium at competitive mortgage rates. VA mortgage rates are lower than rates on conventional loans.
Why Are Many Veteran Homebuyes Moving To Colorado?
Many active and retired members of the U.S. Armed Services are migrating to Colorado due to the great economy, excellent job opportunities, low cost of living, affordable housing due to low property taxes, and great climate and landscape. The state of Colorado also has one of the largest populations of both active and retired members of the United States Military. Many veteran home buyers either seek Colorado to be home or plan on retiring in the great state of Colorado. VA no longer has a maximum loan limit on VA loans. In this article, we will discuss and cover how you can now qualify for VA loans in Colorado with no maximum loan limits and lenient mortgage guidelines.
Prior Maximum Loan Limits On VA Loans in Colorad
Here Are The Biggest Cities With Maximum Loan Limits Prior To The Changes Of No Loan Limits On VA Loans In The State Of Colorado:
- Denver – Denver County – $529,000
- Colorado Springs -+ El Paso County – $453,100
- Aurora – Adams, Arapahoe, Douglas County- $ 529,000
- Fort Collins – Larimer County – S453,100
- Lakewood – Jefferson County – $529,000
- Thornton – Adams County – $529,000
- Arvada – Adams and Jefferson County – $529,000
- Westminster – Adams and Jefferson County – $529,000
- Pueblo – $453,100
- Centennial – Arapahoe County – $529,000
Again, the above loan limits on VA loans are null and void because there are no maximum loan limits on VA loans as of 2020. Going into 2022, homebuyers with a VA certificate of eligibility (COE) will not have to worry about getting priced out of the housing market because there is no loan limit on VA loans.
Colorado VA Lenders With No Overlays on Agency Guidelines
VA lending can be very confusing. Most veterans do not know where to start the mortgage process. Or they get turned down by their bank and give up hope. There is hope! VA loan requirements are laxer than conforming financing.
Veteran Borrowers can find all these requirements here.
How To Get VA Loan Approval After Being Denied?
Gustan Cho Associates are mortgage brokers licensed in 48 states with over 170 wholesale mortgage lenders. Over 75% of our borrowers are folks who could not qualify at other mortgage companies. We are able to do loans other lenders cannot do. It is very common for these guidelines to be confusing. Most lenders add overlays to VA agency mortgage guidelines. To save time and a headache call the experts at Gustan Cho Associates. GCA Mortgage are experts in VA financing, call us at 262-716-8151 or text for a faster response. Our team at GCA Mortgage Group is able to answer questions on your scenario. We are experts in VA Loans Colorado. For Veterans in other states, the team at GCA Mortgage Group will be able to pair you with one of our teammates on the Gustan Cho Associates.
Buying House in Colorado With VA Loans With No Money
Gustan Cho Associates are experts in helping homebuyers purchase a home in Colorado with no money out of pocket. We do not require any down payment. Closing costs can be covered with seller concessions and/or lender credit. We can structure a way where the homebuyer does not have to put up any of their own money. Citizens of Colorado know that property values of skyrocketed over the past 5 years. This makes it hard for many Veterans to obtain a home. Most counties in the United States of America used to have VA loan limits that mirror the limits for conventional financing. The good news is a select number of counties in Colorado have increased loan limits. For example, if you live in Pitkin County is considered a high-cost area. It is possible to buy a home with a VA in this county for $679,650 with 100% financing. The funding fee for the VA loan will be added to that loan amount and can be financed into your payment. Again, there are no maximum loan limits on VA loans at Gustan Cho Associates.
VA Loans With Collections and Charged-Off Accounts
Homebuyers with poor credit can qualify for VA loans in Colorado with outstanding collections and charged-off accounts. You do not have to pay outstanding collections and/or charged-off accounts to qualify for VA loans in Colorado. The VA does not set limits on the amount veteran borrowers can finance to use a VA loan. It used to have a limit on the amount they will they can assume the liability. The VA loan limits do follow the same limits as Fannie Mae and Freddie Mac. These limits used to be put in place under the provisions of the Housing and Economic Recovery Act of 2008. Please check back annually as these loan limits do change. It was important to understand that loan limits and the amount of entitlement a veteran has are not the same. The basic entitlement currently offered to veterans is $36,000. However, the VA no longer has maximum loan limits on VA loans.
VA Maximum Loan Limit in Colorado
VA loans no longer have loan limits on VA loans. We will go over how VA loans used to work back in the day. Here is a case scenario on how down payments used to be calculated on VA loans:
For VA homes less than the county limit. This example will use a county limit of $453,100:
Assuming you have full entitlement ($36,000) and veterans want to buy a home for $350,000.
- $453,100 * 25% = $113,275
- Meaning $113,275 will be the maximum guaranty for available entitlement
- $350,000 * 25% = $87,500
In the above example, the veteran has a guaranty or the lesser of 25% of the county loan limit or 25% of the loan amount. As seen above the VA will guarantee 25% of the loan amount or $87,500. Since $87,500 is less than the maximum of $113,275 (county limit), a down payment should not be necessary. However, this no longer holds true because there are no maximum loan limits on VA loans.
Colorado High-Balance VA Jumbo Loans
Now let’s explore an example of a home in a high balance area of Colorado. Any VA loan with higher than the conforming loan limits is called VA Jumbo Loans or High-Balance VA loans. This example will take place in a single-family home in Summit County. Summit County has a one-unit loan limit of $679,650. This is an example of how VA loans used to be calculated with maximum loan limits:
- Assuming you have full entitlement ($36,000) and you want to buy a home for $679,650
- $679,650 * 25% = $169,912
- Once again meaning $156,250 will be the maximum guaranty of available entitlement
- $169,912 / $679,650 = 25% guaranty
Since the guaranty is equal to a 25% guaranty the VA allows, a down payment should not be needed.
Case Scenario on How VA Loans Used To Be Calculated When There Were Loan Limits
Let’s go over one more example of when the VA used to have maximum loan limits. In this example, the veteran will be buying a home over the loan limit for Denver County. The loan limit for Denver county in 2018 is $529,000.
- We will once again assume the veteran has full entitlement (36,000) and the veteran wants to buy a home for $650,000
- $529,000 * 25% = $132,250. As you have learned from the above examples, this is the maximum guaranty for full entitlement
- $132,250 / $650,000 = 20.37% guaranty
In this example VA’s guarantee is less than 25%, meaning home buyers will need a down payment to meet investor requirements.
Below is how that down payment will be calculated:
- $650,000 * 25% = $162,500
- $162,500 – $132,250 = $30,250 Down Payment
That is less than a 5% down payment! This is still an amazing loan for you! To obtain a Jumbo Mortgage you generally need at least a 10% down payment and may require mortgage insurance. So, at a minimum, you would be putting down $65,000 in this example. To use an FHA loan for this property you would need to put down $121,000. You would have to put down the difference between the purchase price and the max loan amount. The same is true for Fannie Mae or Freddie Mac conforming mortgages. So even when buying a home above the loan limits, your VA loan will most likely be the best route to go.
The above is an illustration of how VA loans with higher loan balances used to be calculated. However, VA no longer has a maximum loan limit on VA loans.
VA Loan Requirements in High-Cost Areas
The fine state of Colorado has many counties. Some notable counties where it was considered high-cost areas are the following. However, VA no longer has a maximum loan limit on VA loans:
- Adams – $529,000
- Arapahoe – $529,000
- Boulder – $578,450
- Broomfield – $529,000
- Clear Creek – $529,000
- Denver – $529,000
- Douglas – $529,000
- Eagle – $363,150
- Elbert – $529,000
- Garfield – $679,650
- Gilpin – $529,000
- Jefferson – $529,000
- Lake – $625,500
- Park – $529,000
- Pitkin – 679,650
- Routt – $625,500
- San Miguel – $625,500
- Summit – $625,500
FAQ on The VA Loan Eligibility Requirements
Below, we will go over the common frequently asked questions (FAQ) on VA loans.
VA Down Payment Requirements
Q. How much is the down payment requirement on VA loans?
- A. VA loans do not require a down payment on a home purchase. Lenders offer 100% financing at competitive rates due to the government guarantee.
VA Guidelines on Mortgage Insurance
Q. Is mortgage insurance premium required on VA loans?
- VA loans do not require mortgage insurance premiums like FHA loans.
- VA loans do require a one time VA Funding Fee which can be rolled into the loan balance
What Are The Minimum Credit Score Requirements on VA Loans?
Q. What are the minimum VA credit score requirements?
- There are no minimum credit score requirements.
- Gustan Cho Associates has closed countless VA mortgages with 500 credit scores
VA DTI Requirements on VA Loans in Colorado
Q. What is the maximum debt to income ratio cap on VA home mortgages?
- There is no cap on debt to income ratio as long as you can get an approve/eligible per automated underwriting system.
- The key to getting an AUS approval is to have timely payments and strong residual income.
VA Guidelines on Collections and Charged-Off Accounts
Q. Are collections and charged-off accounts allowed to qualify?
- Outstanding collections and charged-off accounts do not have to be paid to qualify.
What Is The Waiting Period on VA Loans After Bankruptcy and Foreclosure?
Q. What is the waiting period after bankruptcy and foreclosure to qualify?
- There is a two-year waiting period after the Chapter 7 Bankruptcy discharged date to qualify.
- There is a two-year waiting period after foreclosure, deed in lieu of foreclosure, and short sale to qualify for VA loans.
- You can qualify for a VA loan during the Chapter 13 Bankruptcy repayment plan with trustee approval and via manual underwriting after being in the plan for 12 months.
- There is no waiting period after the Chapter 13 Bankruptcy discharged date.
- If the discharge is not seasoned for two years, it needs to be a manual underwrite.
Apply For VA Loan Bad Credit
Veteran Home Buyers who are not sure how much entitlement they have left should contact the VA, or reach Gustan Cho Associates. The team at GCA Mortgage Group can assist veterans with obtaining a certificate of eligibility. Michael Gracz and Gustan Cho Associates Mortgage Group specialize in VA financing with no LENDER OVERLAYS. There are no minimum credit score requirements with VA Home Loans. VA also does not have a debt-to-income ratio cap. Michael Gracz has countless borrowers with debt to income ratios of 60% DTI who could not qualify elsewhere but has qualified, approved, and closed on their loans. Our specialty is helping veteran borrowers with under 600 credit scores.
VA Loans During Chapter 13 Bankruptcy in Colorado
Another group of veteran borrowers Gustan Cho Associates helps is veteran home buyers in Chapter 13 Bankruptcy Repayment Plan or veteran buyers who just recently gotten their Chapter 13 Bankruptcy discharged. There is no waiting period after the Chapter 13 Bankruptcy discharge date to qualify for VA Loans at Gustan Cho Associates. We are direct lenders with ZERO OVERLAYS on government and conventional loans. We also offer TBD underwriting so veteran borrowers can be sure they qualify for VA loans before they start searching for a home! Call us at Gustan Cho Associates at 262-716-8151 or text for a faster response to get started today. Or email us at [email protected]
This article on Colorado VA lenders with no overlays for bad credit was updated and modified with the newest VA loan requirements on June 7h, 2022