Colorado FHA Loans
Whether you're looking to make that ski vacation permanent or just searching for just the right place to raise your children, buying a house in Colorado is a great choice, especially right now. With the economy in a downturn, real estate prices are lower than ever and buyers are motivated to make you a great deal. But the process of buying a house can be an overwhelming and confusing one if you're buying for the first time, especially when it comes to assessing your financing options. This is where Colorado FHA loans come in.
Are FHA Loans Right for Me?
First time home buyers often make the mistake of going straight to their bank and applying for a loan without considering other options. However, when you begin to investigate your options beyond the typical bank loan, you'll find that you have a lot of choices when it comes to mortgage products. One such choice is a loan administered by the Federal Housing administration or FHA for short. The Colorado FHA loan has several advantages such as:
- Competitive rates, which are within .125 percent of a conventional loan and often have fewer points than a conventional loan.
- Allowance for a blemished credit history. FHA loans permit lower FICO scores than conventional loans and allow buyers to obtain an FHA loan two to three years after bankruptcy discharge as long as credit scores are acceptable.
- Looser requirements regarding downpayment. FHA loans permit buyers to finance up to 96.5% of the purchase price of the home.
Colorado FHA Loan Limits
As you can see, FHA loans in Colorado can be a great choice if you meet a few requirements of the loan, one of which is a limit on how much you can borrow. FHA loans generally have loan caps which are set each year depending on the median home price for your area and the cost of living. The minimum amount that the program will lend for 2009 is $271,050 for a single family home, and if you do live in a high cost of living area, this amount will adjust. For instance, in Denver, the maximum FHA loan amount is $406,250. In Colorado Springs, the maximum loan is $325,000 and in Summit, the loan amount increases to $729,750. These are for single family dwellings, however, and if you're thinking about buying a multi-family unit with an FHA loan in Colorado, check with your lender regarding the current limits for your area.