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FHA loans are a popular financing option among home buyers in Colorado. They are especially popular among first-time buyers, due to the relatively low down payment that is allowed. Below, we have answered some frequently asked questions relating to Colorado FHA loans.
The Federal Housing Administration (FHA) mortgage insurance program is unique in that it provides government insurance for home loans originated within the private sector. This insurance gives mortgage lenders some degree of protection from losses relating to borrower default. It also enables lenders to offer more flexibility, in terms of mortgage qualification criteria — and that benefits borrowers direcmortgages-for-first-time-home-buyers/tly.
Requirements for Colorado FHA loans are outlined in HUD Handbook 4000.1, also known as the Single-Family Housing Policy Handbook. But that’s a 1,000-page resource, and you’re probably in a hurry.
As mentioned earlier, FHA loans are insured by the government via the Federal Housing Administration. This government backing allows lenders to be a bit more flexible when qualifying borrowers (compared to a conventional mortgage product). Borrowers who have trouble qualifying for conventional financing might be able to get approved through the FHA loan program.
That’s one of the primary advantages of this program. But there are others as well. Borrowers also enjoy the relatively low down payment and the fact that they can use gift money provided by a third party to cover some or all of their down payment expenses.
Colorado FHA loans have specific size limits that are determined by the Department of Housing and Urban Development. These limits put a cap on how much the government will ensure, so they can also affect the amount you are able to borrow when using an FHA loan in Colorado.
Loan limits vary by county because they are based on home values, which also vary by location. In Colorado, the 2024 FHA loan limit for a single-family home purchase ranges from $498,257 to $1,149,825. The limit for the Denver metro area, the most populous region of the state, is $816,500. Higher limits are allowed for multifamily properties such as duplexes.
Because FHA loans are originated in the private sector, the application process is very similar to any other type of mortgage product. There are a few extra documents that are specific to the FHA program, but the overall process is similar across the board.
As a first step, you might want to consider getting pre-approved for a Colorado FHA loan. We can help with this. We can review your current financial situation to determine how much you might be able to borrow. This will help you focus your home search on the types of properties you can afford.
You’ll need to complete a standard mortgage application as well, and provide additional documents relating to your finances. (This is true for Colorado FHA and conventional loans alike.) Again, the process is very similar regardless of the financing method.
At Sammamish Mortgage, we offer a wide variety of mortgage programs and tools with flexible qualification criteria, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. We have been serving the entire state since 1992, as well as the broader Pacific Northwest region that includes Washington, Oregon, Colorado, and Idaho. Please contact us today with any financing-related questions you have.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.