Moving to Fort Carson, Peterson Space Force Base, or another military base near Colorado Springs? Looking for a home that’s not located next to a mile-long commute? Does nothing the real estate market have to offer have the space or layout you desire for your family?
With a Colorado Springs VA Construction Loan, qualified veterans, service members, and military families will have access to finance land purchase, home building expenses, and a permanent loan in just one package – and in many cases without requiring a down payment. Whether you want to know where and how to get a VA Construction Loan in Colorado Springs, here is all you need.
Read on and find all details about building requirements, financing loan details, guidelines for builder certification, an approximate budget for construction costs, desired building neighborhoods, and common pitfalls so you can confidently transition from design and blueprints to home sweet home!
Quick Answer
So, what do you need to get your VA construction loan in Colorado Springs? Well, you need your Certificate of Eligibility (COE), you need a VA construction lender, a lender-approved general contractor, and a residential lot on which to build. This type of loan provides a single mortgage to cover land acquisition and 100% of your construction costs, all with 0% down.
Key Takeaways
- Eligible veterans can build with 0% down.
- One-Time Close financing combines construction and mortgage.
- Builder must meet lender requirements.
- COE is required before approval.
- Construction typically takes 6–12 months.
- Choosing an experienced VA construction lender reduces delays.
Why Build a Home in Colorado Springs Instead of Buying an Existing Home?
It’s not always a money-saving idea to buy a pre-built home in El Paso County, as houses there typically carry a premium for out-of-date designs. With a new home, you don’t need to settle, so come and see why choosing new is the very best option to pursue for military families relocating to the Front Range.
- Rapid population growth: With thousands of military and civilian families and professionals relocating to the Pikes Peak region every year, the demand for housing remains elevated.
- Limited resale inventory: The supply of houses for sale remains extremely short, leading to bidding wars over what has become quite expensive real estate.
- Growing custom-home communities: There’s new sprawl out in north/east El Paso County, with new roads, new infrastructure, and new parks going in every week!
- Mountain views: Custom building is the way to position your home exactly right for a clear view of Pikes Peak.
- Larger lots: Modern communities don’t have tiny yards – all our new houses provide ample backyard space for you and your family to enjoy.
- Better energy-efficient homes: In winter, your electricity bills are lower in a new home. This is thanks to brand-new insulation, cutting-edge heating, and double-paned windows.
- Ability to customize: There are no compromises here – everything from your floor plans to your finishes is custom-tailored to you.
Building vs. Buying in Colorado Springs
| Building a New Home | Buying an Existing Home |
|---|---|
| Customize floor plan and finishes | Limited customization |
| Modern energy-efficient construction | May require upgrades or renovations |
| Builder warranty included | Repairs may be needed after purchase |
| New building materials and systems | Older components may have shorter remaining life |
| Typically longer move-in timeline | Faster occupancy after closing |
| Often available in expanding communities | Inventory may be limited in competitive areas |
Can You Get a VA Construction Loan in Colorado Springs?
If you’re a military family, you might mistakenly believe your housing allowance or grant is only valid for purchasing existing houses. Here’s the real deal when it comes to building your dream home from the ground up in the Front Range!
Absolutely! The VA loan program actually enables custom home building directly. The VA guarantees a portion of the loan (typically 25%), which is what allows lenders to offer competitive interest rates on your Colorado VA Construction Loan with 15- and 30-year payment plans!
This way, you’re not required to shell out your life’s savings.
Eligibility Requirements: Who Qualifies for a VA Construction Loan?
Meeting these general requirements also safeguards you and your lender against costly project pitfalls. Before breaking ground on your plans, you’ll need to meet a range of tight financial and service metrics for your case to proceed.
To be approved for this financing program, you’ll have to meet all of the VA construction loan eligibility requirements to meet this baseline:
- Military Status: You must be on active duty, a veteran, or a member of the National Guard or Reserve.
- COE: To demonstrate that you qualify for VA home building loans, you’ll need to obtain a VA loan entitlement certificate.
- Credit Score: Current construction overlays require a minimum FICO score of 620 (with higher tiers required at larger loan amounts). Manual underwrites, or deviations from a credit score, are not allowed by a Lender on a construction file.
- AUS Approval: Your file needs an Approve/Eligible finding from DU before it can move forward through automated underwriting.
- Contractor Vetting: You’ll want to ensure your contractor meets your lender’s approval requirements and maintains general liability and workers’ compensation coverage that satisfies current lender minimums.
- Primary Residence: You also can’t live anywhere else; this house is now officially your primary home.
- No DIY: They DO NOT allow you to do any of the work yourself as “Do It Yourself” and therefore require an approved contractor.
VA Construction Loan Eligibility Checklist
| Requirement | Typical Guideline |
|---|---|
| Military Service | Eligible veteran, active-duty service member, National Guard, or Reserve member |
| Certificate of Eligibility (COE) | Required |
| Minimum Credit Score | 620 minimum (higher tiers required at larger loan amounts) |
| Automated Underwriting | Approve/Eligible finding from DU required |
| Down Payment | Often 0% for borrowers with full entitlement |
| Builder Approval | Licensed and lender-approved contractor |
| Occupancy | Primary residence only |
| DIY Construction | Not permitted |
How to Get a VA Construction Loan in Colorado Springs: Step-by-Step Guide
Constructing a home can be a long and detailed process that’s closely tied to your appraiser, builder, and lender. By following the steps laid out below, you’ll ensure your budget remains on track, as will your home-building experience:
Follow our step-by-step process for your VA Construction Loan in Colorado Springs:
- Step 1 – Check Your VA Loan Eligibility: Apply for a Certificate of Eligibility (COE). This document establishes your military entitlement and helps determine if you’re exempt from paying the funding fee.
- Step 2 – Choose a VA Construction Loan Lender: Consider working with a specialized VA Construction Lender who can facilitate an authentic VA one-time close construction loan and save you money on mortgage costs.
- Step 3 – Determine Your Budget: Review your BAH and salary to determine which budget range would work for your VA Construction Loan Application in Colorado Springs.
- Step 4 – Find Land in Colorado Springs: Choose a home site with access to the local utility grid. While acre home sites in Peyton, Falcon, or Monument may exceed $150,000, a traditional home site will cost roughly $50,000 on the outskirts of Colorado Springs.
- Step 5 – Choose a VA-Eligible Builder: Use a certified contractor whose contractor selection is approved by your lender and is insured with general liability.
VA Construction Loan Timeline
| Stage | Typical Timeline | What Happens |
|---|---|---|
| Certificate of Eligibility (COE) | Same day to 1 week | Obtain or verify your VA eligibility. |
| Pre-Approval | 2–7 days | Lender reviews your income, credit, assets, and military eligibility. |
| Builder Approval | 2–4 weeks | Contractor licensing, insurance, financials, and experience are reviewed. |
| Land Selection & Purchase | 1–6 weeks | Select an eligible home site that meets lender and VA requirements. |
| Plans, Specifications & Appraisal | 2–4 weeks | Construction plans are reviewed, and the home’s future value is appraised. |
| Loan Underwriting & Closing | 30–45 days | Final approval, loan documents signed, and construction financing begins. |
| Construction Phase | 6–10 months | Builder completes the home while receiving scheduled draw payments. |
| Final Inspection & Loan Conversion | 1–3 weeks | The final inspection confirms completion, and the loan converts to a permanent mortgage. |
Colorado Springs Neighborhoods Popular For New Construction
Best Areas to Build Near Colorado Springs Military Bases
| Area | Best For | Approximate Commute |
|---|---|---|
| Falcon | Larger lots and new communities | 10–20 minutes to Peterson SFB |
| Peyton | Acreage properties and custom homes | 20–30 minutes to Peterson SFB |
| Fountain | Affordable new construction | 10–15 minutes to Fort Carson |
| Security-Widefield | Military families | 10–15 minutes to Fort Carson |
| Monument | Luxury homes and mountain views | 25–35 minutes to USAF Academy |
| Tri-Lakes | Larger custom homes | 20–30 minutes to USAF Academy |
What Can a VA Construction Loan Cover?
One concern for veterans is shouldering the costs of land preparation and city permits. Luckily, with this program, you can bundle nearly every expense of building directly into your mortgage!
Here are some things your VA Construction Loan Colorado Springs can finance:
- Site and land purchase and development
- Site work – grading and excavation, pouring of foundations
- Sewer and water lines, well drilling, and septic installation
- Materials for building the physical home, contractor labor
- Foundation forms, basic site work like driveways and garages, basic landscaping
- Architectural blueprints, structural plans, county permits
- A compulsory 2% contingency fund in builder contracts under current overlays to cover cost fluctuations during construction.
How Much Can You Borrow?
You must find out how much you qualify for before you start drawing plans. Here’s exactly how VA construction loan limits work in Colorado Springs:
Unlike a standard VA purchase loan, which has no VA-imposed maximum for borrowers with full entitlement, current VA construction overlays cap the maximum base loan amount at $2,000,000. Within that cap, your maximum LTV and DTI depend on your loan amount and FICO score, and loans of $1,000,001 or more require three qualifying compensating factors to be eligible. Your lender can walk you through the specific tier that applies to your loan amount and credit profile.
Common Challenges Veterans Face in Colorado Springs with VA Construction Loans
Front Range Development is incredibly rewarding, but with all development, it doesn’t come without certain localized difficulties. Forewarned, forearmed with the right know-how, you can implement solutions to bypass delays.
For VA Construction Loan Applications in Colorado Springs, expect some local caveats:
- Limited VA construction lenders: There aren’t many direct VA home construction loans, and not many places offer the same financing for the permanent phase.
- Builder approval delays: Yes, contractors have to submit a ton of business paperwork to meet the bank’s insurance requirements.
- Appraisal timing: The peak spring and summer PCS season may delay VA appraiser reports.
- Mountain lot challenges: When you build on an incline, you usually end up paying a lot for retaining walls and for soil analyses.
- Utility installation: For your budget, installing a private well and providing electrical service for your isolated mountain property will be costly initially.
- Weather-related construction delays: Building activity comes to a standstill for a short time during Colorado’s heavier winter months.
- Wildfire-prone areas: Home in a forested area = higher insurance premiums, greater need for rigid building-material regulations.
Colorado Springs Military Considerations
Your El Paso County assignment demands housing designed around the demands of military life. Let’s take a look at how local military installations can influence where you live and what you build there.
Home to five active-duty military installations – Fort Carson, Peterson SFB, Schriever SFB, USAF Academy, and Cheyenne Mountain – a custom build within 20 to 30 minutes of Colorado Springs’ bases provides superb future resale and rental appeal once you PCS.
Veteran Property Tax Exemptions in Colorado
Thank you, Colorado, for recognizing our veterans with some remarkable financial perks. Let’s explore how these local property tax exemptions may impact your mortgage payment each month.
Colorado exempts 50% of the first $200,000 of actual value from property tax for honorably discharged veterans with a 100% permanent and total service-connected disability rating (or individual unemployability status). This is a statewide Colorado exemption, administered by the assessor in whichever Colorado county your residence homestead is located, and it reduces the amount escrowed with your mortgage payment.
Estimated Costs of Building a Home in Colorado Springs
It’s crucial to get your finances straight before your custom build even starts. Here’s an approximate budget breakdown so you know how much to save before the bulldozer even moves dirt.
| Expense | Estimated Cost |
|---|---|
| Residential Lot | $50,000–$120,000 |
| Site Preparation | $10,000–$25,000 |
| Utility Connections | $5,000–$20,000 |
| Foundation | $12,000–$30,000 |
| Home Construction | $150–$350 per sq. ft. |
| Driveway & Basic Landscaping | $5,000–$20,000 |
| Builder Contingency | 2% of construction cost under current overlays |
| Closing Costs | 2–5% of loan amount |
The final cost to you depends on your site location, custom floor plan, utilities, and builder prices throughout Colorado Springs.
Mistakes to Avoid with VA Construction Loans
A handful of planning mistakes can lead to costly delays and out-of-pocket expenses. Read below for 5 simple planning mistakes to avoid to ensure your construction runs on time and on budget.
- Construction starting before you’re ready to close.
- Not leaving any “cushion” for unexpected cost overruns.
- Working with someone who isn’t a licensed or properly certified contractor.
- Drifting from the original design once your appraisal is done.
How to choose a VA Construction Lender in Colorado Springs
The most crucial piece to your building project? Finding a specialty lender. Here is how you can find the perfect mortgage team for your Front Range build:
Verify that the lender can support in-house construction management, including draws to the builder. You will want an in-house Staff Appraisal Reviewer (SAR), which allows for in-house review and prevents third-party delays.
VA Construction Loans: Your Path from Blueprint to Key.
It’s so fulfilling to build your dream home on Colorado’s gorgeous Front Range with the right help. Shirley Mueller, Sr. VP of Veteran Lending, is our resident expert in guiding military families through affordable, convenient financing for their new builds.
Her team will meticulously review your builder’s plans and guide you through your Certificate of Eligibility with 100% financial transparency. Visit VA Construction Loans today, pre-qualify to build with zero down, and get paired with your dedicated, all-in loan specialist!
About Shirley Mueller
Shirley Mueller is Sr. VP of Veteran Lending, NMLS ID 336103, and has helped 3,000+ military families since 2003. She specializes in entitlement analysis, residual income review, and VA program structuring, and her practice is largely referral-driven.
Schedule a Consultation with Shirley Mueller.
CrossCountry Mortgage, LLC | NMLS ID: 336103 (Shirley Mueller). Equal Housing Lender. This article is for informational purposes only; loan programs, overlays, and eligibility requirements are subject to change and lender approval.
FAQs
1. Can I Buy Land And Build With One VA Loan In Colorado Springs?
Yes. A single VA One-Time Close loan allows you to finance buying land and building on it. This simplifies the transaction for you because your construction and land are rolled into a single closing, saving you a ton on lender and title fees.
2. Which Neighborhoods Are Best For Building Near Fort Carson?
These are some of the best areas located around Fort Carson. Fountain, as well as Security-Widefield, are southern El Paso County communities that offer extremely low land costs and rapid growth, and are within a 15-minute commute to active gates at Fort Carson.
3. Can I Use My Own Builder?
You can’t build a house as your own GC. The VA has zero tolerance for DIY and building on your own. You will have to bring in a licensed and insured General Contractor who meets your lender’s approval requirements and carries workers’ comp.
4. Are Mountain Lots Eligible?
You can get a VA construction loan on a mountain property. Still, you’ll need extensive soil testing and a retaining wall because it’s not flat. You should also plan for additional costs to connect utilities, dig your own private well, and install a septic system.
5. How Long Does Construction Take In Colorado Springs?
In total, the construction process for a home usually lasts 6 to 12 months. This is usually approximately 45–60 days of lender underwriting and appraisals and then another six to ten months of physical home construction (staged over that period).
6. Does Colorado Have A Property Tax Exemption For Disabled Veterans?
Yes. Colorado exempts 50% of your main home’s actual value (up to $200,000) from property tax if you have a 100% permanent and total service-connected disability rating (or qualifying individual unemployability status). This is a statewide Colorado exemption, not specific to El Paso County — it applies to a qualifying primary residence anywhere in Colorado, administered through your county assessor.
7. How Close Can I Build To Peterson Space Force Base?
Plus, you can build a home a 5- to 15-minute drive away from Peterson Space Force Base. Eastern Colorado Springs, Falcon, and Peyton are home to several of the fastest-growing communities right next to the Peterson and Schriever Space Force gates.
8. Can I Use A VA Construction Loan For Acreage Near Monument Or Peyton?
Yes, you can buy land right outside Monument and Peyton! You need to make sure it complies with local zoning laws and has clear, safe road access to a public road to meet the VA’s stringent acreage minimums.
9. Which Military Installations Near Colorado Springs Make VA Construction Loans Popular?
Construction loans are in high demand due to the many installations located near Ft. Carson, Peterson AFB, Schriever AFB, USAFA, and Cheyenne Mountain. With a large number of active-duty service members residing locally at one of these 5 facilities, there is consistently strong demand for custom home construction.
10. Do I Need A Down Payment For A VA Construction Loan In Colorado Springs?
Are you a fully entitled eligible veteran? No problem with that! No down payment is required if you fully qualify. You can buy both the land and build the structure of your dreams with absolutely 0 cash due at closing!
11. What Credit Score Is Typically Needed For A VA Construction Loan In Colorado Springs?
You’ll need a credit score of at least 620 to qualify under current construction overlays (higher tiers apply at larger loan amounts). Construction loans come with tight underwriting regulations. That is, you’ll need an automated Approve/Eligible finding from DU, without any manual underwrites or credit-score deviations.
12. Can I Build A Home With A VA Construction Loan While Relocating To Fort Carson?
Is it possible to manage a custom home build across the country? Absolutely. Lenders allow you to use your documented Basic Allowance for Housing (BAH) as income, and you are capable of closing on your home without being in the state if you use an authorized military Power of Attorney.
