This BLOG On VA Loans Colorado With Higher Loan Limits And No Overlays Was PUBLISHED On May 27th, 2020
VA Loans Colorado: Qualifying for VA Loans Colorado with no maximum loan limit.:
VA Loans Colorado Mortgage Guidelines:
- The state of Colorado is one of the fastest-growing states in the nation
- The real estate market is appreciating year after year in many counties of Colorado
- 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 with no maximum loan limits.
Prior Maximum Loan Limits On VA Loans
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.
Qualifying For VA Loans Colorado
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.
- It is very common for these guidelines to be confusing
- Most lenders add overlays to these guidelines
To save time and a headache call the experts at Gustan Cho Associates. GCA Mortgage Group 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.
Home Values In Colorado And Impact On VA Loans
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.
The VA does not set limits on the amount veteran borrowers can finance to use a VA loan. But they do limit the amount they will they can assume the liability of. The VA loan limits do follow the same limits as Fannie Mae and Freddie Mac. These limits were 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 is 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.
Down Payment Requirements On VA Loans
How are 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 guaranty 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 is no maximum loan limits on VA loans.
Down Payment Required On High Balance VA Loans
Now let’s explore an example for a home in a high balance area of Colorado. This example will take place on a single-family home in Summit County. Summit County has a one-unit loan limit of $679,650. This is an example on 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 On VA Loans
Let’s go over one more example when 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 guaranty 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 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 on how VA loans with higher loan balances used to be calculated. However, VA no longer has a maximum loan limit on VA loans.
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
Veteran Home Buyers who are not sure how much entitlement they have left should contact the VA, or reach to 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 debt to income ratio caps. 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. 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 Chapter 13 Bankruptcy discharged 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 loan 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 firstname.lastname@example.org.