V.B. Adding more information to educate you a bit...Typically in very expensive housing markets (New York City, San Francisco, Washington, D.C., etc.) realtors tell buyers upfront that buying a cheap or foreclosed home is not realistic and the odds of getting one is 0. Since I was a realtor in the NYC area (extremely expensive), I also had to tell buyers to sacrifice and instead of getting a house, the only thing they could afford was a condo or a coop.
Based on your situation I’m getting the idea that Denver is now one hot and expensive housing market. Unfortunately you need to be realistic and if your approval is much less than what the average house sells for, then you need to start looking at condos, manufactured homes, etc. because this is all you can afford. I hate to say it but buying a single family house is not going to happen. Sorry.