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FHA Loans in Grand Junction

An FHA home loan is a mortgage that is insured by the Federal Housing Administration (FHA) and is designed to make homeownership more accessible to a wider range of people, particularly first-time homebuyers and those with less-than-perfect credit.

FHA loans typically have lower down payment requirements and more flexible lending criteria compared to conventional loans.  However, while FHA loans require less of a down payment that flexibility comes with a cost.  Most lenders will require Private Mortgage Insurance (PMI) on FHA loans which is added to your monthly payment.

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What else should you know about FHA home loans in Colorado?

  1. Lower Down Payment: FHA loans typically require a down payment as low as 3.5% of the purchase price, making it easier for borrowers to buy a home with less cash upfront.  You can use our Mortgage Calculator to estimate your monthly payments and required cash down. 

  2. Flexible Credit Requirements: While FHA loans have minimum credit score requirements, they are generally more lenient compared to conventional loans, making them an option for borrowers with less-than-perfect credit.  Typically, the minimum credit score for an FHA loan is 580.

  3. Mortgage Insurance: FHA loans require borrowers to pay mortgage insurance premiums, both upfront at closing and annually as part of their monthly mortgage payments. This insurance protects the lender in case the borrower defaults on the loan.

  4. Loan Limits: FHA loan limits vary by location and are set by the Department of Housing and Urban Development (HUD). These limits determine the maximum amount that can be borrowed using an FHA loan in a specific area. Use the FHA Mortgage Limit Tool and see if your property meet the requirements.

  5. Property Requirements: FHA loans have specific property requirements, including minimum property standards that must be met for the home to be eligible for FHA financing.

Overall, FHA loans can be a good option for borrowers who may not qualify for conventional financing but want to achieve their goal of homeownership with more flexible terms and requirements.

What properties are eligible for an FHA loan?

To be eligible for an FHA loan, properties must meet the following criteria:

  1. The property must be your primary residence.

  2. The property must meet minimum standards set by the FHA.

  3. The property must be appraised by an FHA-approved appraiser.

  4. The property must be located in the United States.

Can I use an FHA loan to repair or remodel my home?

Yes, you can use an FHA 203(k) loan to finance the remodeling of your home. This type of loan allows you to combine the cost of purchasing or refinancing a home with the renovation expenses into one loan.

The FHA 203(k) loan program is designed to help homeowners finance both the purchase or refinancing of a home and the cost of renovations or repairs. There are two types of FHA 203(k) loans: the Limited 203(k) and the Standard 203(k).

  • The Limited 203(k) is intended for smaller renovation projects with a maximum loan amount of $35,000.

  • The Standard 203(k) is for more extensive renovations, with the loan amount based on the projected value of the property after the improvements.

These loans can be used to remodel kitchens, bathrooms, add rooms, repair structural issues, or make energy efficiency improvements. It’s important to work with an FHA-approved lender, like First Choice Financial, to apply for an FHA 203(k) loan and ensure compliance with program requirements.

Other low-downpayment, government backed loans that we can help you secure a home with:

USDA Loans in Grand Junction, CO
VA Loans in Grand Junction, CO

If you need to know more about FHA Loans in Colorado or 203(k) loans don't hesitate to call First Choice Financial at (970) 683-1910.

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First Choice Financial

Grand Junction, CO

(970) 683-1910