FHA Loan

In 1934, the Federal Housing Administration (FHA) was created in response to the banking crisis of the 1930s. The idea behind the FHA was to improve and stimulate the housing market and to protect FHA-approved lenders from losses if a borrower were to default on their mortgage payments. In over 80 years, the FHA has insured over 34 million home mortgages and is currently insuring 4.8 million single family mortgages. Colorado is regularly considered one of the best places to live in the country and The Pine Creek Financial Group can help you with an FHA loan whether you plan to settle down in Denver, Colorado Springs, Greeley, or Fountain. 

An FHA Loan is a mortgage loan that is insured by the Federal Housing Administration. FHA Loans are extremely popular with first-time home buyers as they are one of the easiest mortgage loans to qualify for. FHA loans are available for not only purchases, but refinances as well. Cash out refinance and streamline refinance programs are available for those with existing FHA loans. There are also Reverse mortgage options are available for seniors through the FHA’s Home Equity Conversion (HECM) program. 

Easier credit requirements and low down payment options contribute heavily to the popularity of FHA loans. A borrower can qualify for an FHA loan with a down payment of only 3.5 percent which can even be gifted from a family member. Perfect credit is not needed for an FHA loan and borrowers can potentially qualify with a minimum credit score of 580. FHA loans can also be assumable which means that if you want to sell your home, the buyer can take over, or “assume” the loan.

FHA Loan Requirements:
  • Minimum Credit Score - A credit score of a least 580 is required to qualify for an FHA loan. If you have a credit score is between 500 and 579, you may be able to qualify with a down payment of at least 10 percent of the purchase price. 
  • Income Requirements – A debt-to-income ratio of 43 percent or less is typically required. In special cases, a debt-to-income ratio of 45 percent may be approved.
  • Down Payment – A minimum down payment of only 3.5 percent of the purchase price is required. 
  • Property Requirements – The property being purchased must meet certain safety, security, and soundness (structural integrity) requirements which will be inspected by an FHA-approved appraiser. 
There are also two types of mortgage insurance premiums (MIP) that must be paid with an FHA loan. 
  • Upfront mortgage insurance premium – A premium of 1.75% of the home loan is required upfront. This can be paid at closing or rolled into the mortgage itself. 
  • Annual mortgage insurance premium – This is a monthly insurance premium that is based on loan-to-value (LTV) ratio, loan amount, and length of the loan. This can range between .80% and 1.05%.    
The maximum loan amount available for an FHA loan is limited by county.
County Single-Family Duplex Triplex Fourplex
Denver $424,350 $543,250 $656,650 $816,050
El Paso $271,050 $347,000 $419,425 $521,250
Weld $271,050 $347,000 $419,425 $521,250

As a local lender, The Pine Creek Financial Group has the knowledge and expertise to assist borrowers with the many FHA programs available throughout Colorado. Whether you are looking to refinance an existing FHA loan in Colorado Springs, or purchasing your first home in Denver, we work closely with all of our clients to achieve the best rates possible on a loan that meets all of your needs. Contact us today to see how we can help you!

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