2025 VA Home Loan Insights: What Veterans Need to Know

Name: 719 Lending
Price range: $$$

December 19, 2024
Timothy Chase
Mortgage Tips

Summary: If you’re a veteran, active-duty service member, or surviving spouse looking to buy or refinance a home in Colorado Springs, a VA loan is likely your strongest financing option. This comprehensive guide will cover everything about VA loans—from qualification and benefits to navigating the local Colorado Springs real estate market, understanding appraisal requirements, leveraging local expertise like 719 Lending, and planning for the future. There is no word count limit here, so get ready for the most all-inclusive resource you’ll find on this topic.

Why Consider a VA Loan in Colorado Springs?

A Thriving Military Community: Colorado Springs is home to some of the most significant military installations in the country, including Fort Carson, Peterson Space Force Base (previously Peterson AFB), Schriever Space Force Base, Cheyenne Mountain Space Force Station, and the U.S. Air Force Academy. With a large population of current and former service members, it’s no surprise that VA loans are a cornerstone of the local housing market. The city’s economy and culture are shaped by this community, creating a unique environment where VA financing is both readily available and widely understood.

Natural Beauty and Quality of Life: Situated at the base of the Rocky Mountains, Colorado Springs offers an unparalleled combination of scenic landscapes, outdoor recreation, stable neighborhoods, and a strong sense of community. Buyers can find a diverse range of housing options—from single-family homes and modern condos to townhouses and even rural properties. Veterans and service members often choose to settle here for the excellent schools, mild climate, extensive healthcare resources, and countless year-round activities.

Stable and Appreciating Market: The Colorado Springs real estate market is generally stable and often experiences consistent appreciation in home values, making it an ideal location for those utilizing a VA home loan. A VA loan allows you to tap into this stability without requiring a large down payment, which can help you maintain liquidity while you grow your equity in a dynamic environment.

Understanding the VA Loan Benefit

The VA loan program, administered by the U.S. Department of Veterans Affairs, was created to honor and support those who served. Its primary objective is to provide affordable, accessible home financing to veterans, active-duty members, certain National Guard and Reserve members, and surviving spouses. By design, VA loans remove many hurdles that often prevent people from achieving homeownership.

Key VA Loan Advantages:

No Down Payment Required: Unlike conventional loans that often require at least 5% down (or 3% in some special programs) or FHA loans at 3.5%, VA loans allow qualified borrowers to finance 100% of the home’s purchase price. This is a significant advantage, especially in a competitive market like Colorado Springs, where saving for a large down payment might take years.
No Private Mortgage Insurance (PMI): Conventional loans without a 20% down payment typically charge PMI, adding significantly to monthly costs. VA loans do not require any form of ongoing mortgage insurance, saving you potentially hundreds of dollars each month.
Flexible Credit Requirements: While individual lenders can set their own credit score benchmarks, VA loans tend to be more forgiving. Even if you’ve had past financial setbacks—such as lower credit or a previous bankruptcy—VA financing might still be available to you.
Lower Interest Rates: VA loans often have lower average interest rates than conventional loans, translating into substantial long-term savings over the life of your mortgage.
No Prepayment Penalties: You can pay off your VA loan early without facing additional fees, offering you flexibility if you choose to move, refinance, or pay down your principal more aggressively.

What About the VA Funding Fee? The VA Funding Fee is a one-time charge designed to keep the loan program sustainable. It varies depending on your service category, down payment (if any), and whether it’s your first or subsequent use of the benefit. Many borrowers roll this fee into their mortgage, minimizing upfront costs. Surviving spouses and veterans with a service-connected disability are often exempt from the VA Funding Fee, making this benefit even more valuable.

(For more details, visit the U.S. Department of Veterans Affairs official website.)

Eligibility and Qualification Criteria

Basic Eligibility Requirements:

Length of Service: You must meet certain minimum active-duty service requirements. For veterans, this often means 90 consecutive days of wartime service or 181 days of peacetime service.
Current Service Members: Active-duty personnel typically become eligible after 90 continuous days of service.
National Guard and Reserve Members: Generally eligible after six years of service, unless called to active duty sooner.
Surviving Spouses: Certain surviving spouses of fallen service members can use the VA loan benefit.

To verify eligibility, you’ll need a Certificate of Eligibility (COE), which can be obtained through the VA’s eBenefits portal or with help from a trusted lender like 719 Lending.

Credit and Income Guidelines: While the VA doesn’t enforce a minimum credit score, most lenders require a 620 FICO score or higher. Still, if your score is lower, don’t lose hope. Lenders specializing in VA loans may consider compensating factors like stable employment, sufficient residual income, or a history of on-time rent payments. The VA also looks at your debt-to-income (DTI) ratio and residual income to ensure you can comfortably afford your mortgage and other living expenses.

Occupancy Requirements: VA loans are designed for primary residences. You must intend to live in the property as your main home. However, if you receive Permanent Change of Station (PCS) orders or other service-related relocations, consult your lender about how to navigate these circumstances.

Navigating the Colorado Springs Housing Market

Popular Neighborhoods for Military Buyers:

Briargate: Known for top-rated schools, family-friendly amenities, and proximity to shopping and dining.
Powers Corridor: Offers affordable homes, quick commutes to Peterson SFB and Schriever SFB, and plenty of retail conveniences.
Northgate and Flying Horse: Slightly more upscale options with new construction homes, golf courses, and stunning mountain views, convenient to the U.S. Air Force Academy.
Fountain and Security-Widefield: South of Colorado Springs, these communities provide shorter commutes to Fort Carson, affordable housing, and a small-town atmosphere.

Competitive Market Tips: The Colorado Springs market can be competitive, with well-priced homes moving quickly. To increase your chances of success:

Get preapproved for a VA home loan before you start house-hunting.
Work with a real estate agent experienced in VA transactions and local market conditions.
Be flexible with closing timelines and negotiations.
Consider making strong, confident offers supported by a reputable local lender.

The VA Appraisal and Minimum Property Requirements (MPRs)

Understanding the VA Appraisal:A VA appraisal is required and serves two main purposes:

Determine Property Value: Ensures the home is worth at least the purchase price.
Check Minimum Property Requirements (MPRs): Confirms the home meets basic standards for safety, soundness, and sanitation.

Key MPRs Include:

Safe and reliable mechanical systems.
Adequate heating (and cooling in certain climates) to maintain a comfortable living environment.
Sufficient roofing with no major defects.
Access to clean drinking water and a safe sewage disposal system.
No major structural issues, like severe foundation cracks.
No immediate safety hazards, such as exposed wiring.

If the VA appraiser identifies repairs, you can negotiate with the seller to make those changes. Many issues are minor and easily fixed. Having an agent and lender who understand VA guidelines makes this process smoother.

(For more on property requirements, check out the HUD website or the Consumer Financial Protection Bureau (CFPB) for general homebuying tips.)

Working With a Trusted Local Expert: Why Choose 719 Lending?

Not all lenders are created equal, and few understand Colorado Springs’ military market like 719 Lending. Here’s what sets them apart:

VA Loan Expertise: 719 Lending focuses on VA financing and remains current on all guidelines, local market conditions, and lender overlays. This ensures you get accurate, up-to-date information and a lending experience tailored to your unique service history and homebuying goals.
Local Market Knowledge: Their team understands the neighborhoods, home values, and negotiation tactics that give you the upper hand when making offers. They can recommend real estate agents experienced with VA buyers and guide you toward areas that match your lifestyle and budget.
Personalized Guidance: Every veteran’s financial picture and housing aspirations are different. 719 Lending’s approach is to take the time to understand your needs, explain each step in detail, and patiently address any questions or concerns.
Streamlined Communication: Buying a home and getting a mortgage can feel complex. 719 Lending ensures that communication is clear, frequent, and helpful so you never feel lost during the process.

Take the Next Step: Check out our Home Loan Options to learn more about what programs may fit your situation, and get in touch with a mortgage professional at 719 Lending. Whether you’re buying your first home, upgrading as your family grows, or simply relocating to Colorado Springs, they can help.

Refinancing Options: VA Streamline and VA Cash-Out

VA Interest Rate Reduction Refinance Loan (IRRRL) or VA Streamline: If you already have a VA loan, a Streamline refinance can reduce your interest rate with minimal paperwork and cost. Often no appraisal or credit underwriting is required, and you could save substantially on monthly payments.

VA Cash-Out Refinance:If you have sufficient equity, a Cash-Out refinance allows you to take out cash for home improvements, debt consolidation, or other major expenses. You can even refinance non-VA loans into a VA loan, unlocking better terms and eliminating mortgage insurance.

When to Refinance:

If interest rates are lower now than when you purchased your home.
If you’re seeking to shorten your loan term (for example, from 30 years to 15 years).
If you need cash for necessary home repairs or energy-efficient upgrades.

Leveraging VA Energy Efficient Mortgages (EEMs)

Energy Efficient Mortgages allow VA borrowers to finance up to $6,000 in qualified energy-efficient improvements into the loan. This includes things like better insulation, solar heating and cooling systems, or smart thermostats. In a region like Colorado Springs, where temperature swings can be significant, making your home more energy-efficient can reduce utility bills over the long term.

Common Myths and Misconceptions About VA Loans

Myth 1: VA Loans Take Too Long to Close Reality: A well-prepared loan file and an experienced lender often close VA loans just as quickly as other loan types. Much of the “red tape” is long gone thanks to modern technology and streamlined VA processes.

Myth 2: You Can Only Use Your VA Benefit Once Reality: You can reuse your VA loan benefit multiple times. After paying off an existing VA loan or selling the home, you can have your entitlement restored to purchase another property. You may even be able to hold two VA loans simultaneously if you meet eligibility criteria, a great advantage if you’re not yet ready to sell a previous property.

Myth 3: VA Appraisals Are Too Strict Reality: While VA appraisals have standards to ensure the home is safe and livable, these are generally reasonable requirements that most properties meet or can address through minor repairs. The aim is to protect you, not restrict you.

Myth 4: Surviving Spouses Cannot Use VA Loans Reality: Certain surviving spouses of veterans who died in service or due to a service-related disability can use the VA loan benefit. Check eligibility guidelines or ask a knowledgeable lender like 719 Lending.

Additional Tips for a Smooth VA Loan Journey

Improve Your Credit (If Needed): If you have time before buying, work on boosting your credit score by paying down debts, correcting errors on your credit reports, and making all payments on time. Even a modest credit improvement can result in better rates and terms.
Build Some Savings for Closing Costs and Reserves: Although VA home loans don’t require a down payment, having some savings to cover closing costs, optional improvements, or unexpected repairs can give you financial peace of mind.
Be Realistic About Your Budget: Just because you qualify for a certain loan amount doesn’t mean you should borrow the maximum. Consider your lifestyle, future goals, and potential changes in income. Owning a home should add security and comfort to your life, not become a financial strain.
Consider the Future: Are you planning to remain in Colorado Springs long-term? Will you PCS in a few years? If moving is likely, consider how easy it would be to rent out your property or sell it quickly. VA loans are assumable under certain conditions, which can sometimes be a selling point if you list the home later.

Frequently Asked Questions (FAQ)

Q: Can I use a VA loan for a condominium in Colorado Springs? A: Yes, if the condo development is VA-approved. Your lender can help determine if a particular condominium meets VA requirements.

Q: Do I have to pay closing costs? A: Yes, there are closing costs, but the seller can cover some or all of them. Additionally, VA limits certain fees, and you can roll some costs into the loan amount. Negotiations and lender assistance often minimize out-of-pocket expenses.

Q: How does the VA Funding Fee work? A: The VA Funding Fee is a one-time charge that helps keep the VA loan program available at low cost. First-time users with zero down typically pay 2.15% (regular military) or 2.4% (Reserves and National Guard), but rates vary. You can roll the fee into the loan and may be exempt if you receive VA disability compensation or are a surviving spouse.

Q: How long does it take to get a Certificate of Eligibility (COE)? A: In many cases, lenders can obtain your COE online in a matter of minutes. If further documentation is needed, it may take a few days.

Q: Can I refinance a non-VA loan into a VA loan? A: Yes, through a VA Cash-Out Refinance, you can refinance a conventional, FHA, or USDA loan into a VA loan, potentially lowering your rate, eliminating mortgage insurance, and giving you cash back if you have enough equity.

Putting It All Together

A VA loan isn’t just a mortgage—it’s a recognition of your service and a powerful tool to build a stable life in Colorado Springs. From no down payment to no PMI, the benefits allow you to enter the local housing market from a position of strength. Whether you’re buying your first Colorado Springs home, upgrading as your family expands, or simply capitalizing on the area’s stability and amenities, a VA loan can deliver savings, flexibility, and peace of mind.

The local expertise of a lender like 719 Lending cannot be overstated. Their understanding of both the VA’s unique requirements and the Colorado Springs market ensures you’ll get customized guidance, competitive rates, and a stress-free journey to homeownership.

Ready to take the next step? Check out our Home Loan Options at 719 Lending and connect with a mortgage professional who understands your needs as a veteran or service member in Colorado Springs. Make the most of your earned benefits and enjoy all the advantages of homeownership in one of the country’s most desirable cities for military families.

In essence, a VA loan in Colorado Springs isn’t just about getting a house—it’s about securing a home that aligns with your service, your goals, and your future.