With access to hiking trails, ski slopes, and rivers, it’s no wonder thousands of people have purchased a home in Colorado using the FHA loan program. Purchasing a home in the Centennial State is always a great choice.
For some Coloradans, deciding on a home loan financing option can feel like a chore, but it doesn’t have to. Keep reading to see why a Colorado FHA loan could be the right choice for you.
Why consider an FHA Loan in Colorado
As of April 2019, the total FHA loan volume in Colorado was $390 million! This doesn’t come as a surprise since Colorado’s job growth is 13% higher than the national average. Whether you are looking to live in a booming economy, or just want to be in the presence of some beautiful scenery, Colorado is a great choice.
Benefits of an FHA Loan in CO
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Colorado
While there is a maximum loan limit on Colorado FHA loans, the FHA loan limit varies from location to location and is adjusted every year. In Colorado, the baseline limit of $472,030 applies, but in places like Boulder, the limit is $856,750 and the limit in Eagle is $1,075,250 due to the relatively high cost of real estate in these areas.
Take a look at the link below to get the full list of Colorado FHA loan limits in 2023.
Are You Eligible for an FHA Loan in CO?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in CO?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.