FHA Loans Federal Housing Association Loans in Colorado

FHA Loans in Colorado

 

The Federal Housing Administration has been around since its inception in 1934 when the housing industry was flat on its back.  It was created to help insure and finance more homes for first-time homebuyers.  It provides mortgage insurance for single family and multi-family homes, including manufactured residences.

Thanks to the creation of FHA, purchasing a home has become more affordable and attainable for first time homebuyers.  Since its inception, FHA has insured over 34 million loans nationwide and has become the best housed nation in the world.

 

How Does an FHA Mortgage Work?

With an FHA mortgage, the homeowner only needs to put 3.5% of the purchase price of the home as down payment.  Because FHA insured loans require very little  cash investment to close, mortgage insurance is required.

Mortgage insurance provides the lenders with the protection against losses if the homeowner was to default on a mortgage NOTE, allowing lenders to bear less risk because FHA will pay a claim to the lender in the event of a foreclosure.  The cost of mortgage insurance is passed on to the homeowner and is collected, partially up front and in a monthly premium.   The up front mortgage insurance premium is typically added to the base loan amount, but can be paid in full by the home buyer and not added to the total loan amount.  In most cases, the mortgage insurance will drop off after 5-7 years or when the loan reaches 78% of the home value.

There are many advantages to obtaining an FHA loan versus a traditional conventional loan.

  • Lower down-payment requirements. Be sure to ask about the FHA $100 down program available now to CO home buyers.
  • Lower interest rates.
  • Monthly mortgage insurance amount is typically lower than traditional conventional mortgage insurance.
  • Less rigorous underwriting guidelines make it easier to qualify.
  • Non-occupying co-borrowers are allowed on a case by case basis. This is great for new graduates starting out.  They can have a parent co-sign to get into the home and fully assume the loan later, once they can qualify by themselves.
  • Sellers can contribute up to 6% of the purchase price towards closing costs.
  • Qualifying debt ratios are lower for FHA than a traditional conventional loan.  If you would like more information regarding this, please contact Tiffany Hughes.
  • Home improvement funds available for qualifying home purchases.  See page tab for 203K Loans

 

Typical documentation required to start an FHA loan in Colorado includes:

  • 2 years W-2 Statements.
  • 1 month of Current pay stubs.
  • 2 months of bank statements.  All pages for all accounts.
  • 2 years tax returns for self-employed individuals.
  • Divorce decree, if applicable.
  • College transcripts if recent graduate.

 

Each loan is unique and will require additional documentation.  However, this list is a starting point to submit the loan for underwriting review.

To contact Tiffany for more information, click on the Contact me tab to the left or call 303-549-0891.

NMLS# 197552 Powered by Mac5 Mortgage Inc. 199325

NMLS# 197552
Powered by Mac5 Mortgage Inc. 199325