FHA Loans Colorado With No Mortgage Lender Overlays


This BLOG On FHA Loans Colorado With No Mortgage Lender Overlays Was UPDATED On June 1st, 2019 And Written By Michael Gracz Of Gustan Cho Associates Mortgage Group

The state of Colorado covers most of the Southern part of the Rocky Mountains. Colorado is located in the northeastern part of the Colorado Plateau. The state is on the Western region of the Great Plains. The state of Colorado is recorded as the 8th largest state in the U.S. geographically. The state of Colorado is growing at a record fast pace. It has become to be the country’s 21st most populous state. That number may soon change due to more and more families moving to Colorado. According to the U.S. Census, the state’s population is shy of 6 million as of July 2017. The state’s population has increased over 14% since 2010.

Colorado home prices have been increasing double digits since January 2014 with no signs of a correction. The higher mortgage rates in recent months have not made a dent to Colorado housing prices. FHA Loans Colorado is hands down the most popular loan program in the state. There are many counties in the state of Colorado where it is classified as high cost areas by HUD due to high home values.

Role Of FHA And How FHA Works

FHA loan programs are by far the most popular residential mortgage loan programs today.

  • The United States Department of Housing and Urban Development, (HUD) is the parent of the Federal Housing Administration (FHA)
  • FHA is not a lender and does not originate, fund, or services home loans
  • FHA is a governmental agency that insures home loans to lenders such as the following:
    • banks
    • credit unions
    • mortgage companies
    • institutional lenders
    • FHA insure lenders against default by homeowners on their FHA Loans
  • Since FHA insures lenders against losses from foreclosures and default, lenders have less risk
  • They can offer FHA Loans to home buyers with lower credit scores and little down payment
  • Lenders offer home buyers lower interest rates with 3.5% down payment
  • FHA Lenders offer easy credit criteria
  • It is easier to qualify for FHA loans than any other home loan program

What Are FHA Loans And How Can FHA Loans Help Me?

FHA Loans are residential mortgage loans that are available to owner occupant home buyers only that is backed by the federal government.

  • FHA insures loans to mortgage lenders who originate and fund FHA Loans
  • It will be insured against loss if homeowners defaults on their FHA Home Loans
  • As long as lenders have followed HUD Guidelines, the loan is insured
  • FHA Loans have minimal down payment requirement
    • 3.5% down payment on a home purchase
    • extremely generous minimum credit requirements
    • 580 minimum credit score to qualify with 3.5% down payment
  • Conventional Loans require a minimum credit score of 620
  • Debt to income ratio requirements are much more generous on FHA Loans than Conventional Loans as
  • Maximum debt to income ratio caps on conventional loans is 50% DTI
  • With FHA Loans, need a 46.9% front end and 56.9% DTI to get an approve/eligible per Automated Underwriting System Approval

Basics On FHA Loans Colorado

As mentioned earlier, HUD does not fund FHA Loans.

  • FHA has nothing to do with origination, funding, or servicing a mortgage loan
  • FHA is a governmental agency whose purpose is to act as a federal mortgage insurance company
  • It acts as the insurer of FHA Loans that is between borrowers and lenders
  • HUD charges both upfront mortgage insurance premium and annual FHA mortgage insurance premium
  • The hefty FHA Mortgage Insurance Premium is to fund the government mortgage insurance fund so it can insure FHA Loans originated by lenders
  • The mortgage insurance pays for default by homeowners on their mortgages

Low Down Payment Is Great Feature

Down payment, closing costs, income, and credit are all important factors when qualifying:

  • Living costs such as food prices and general living expenses are skyrocketing where it is difficult to save
  • Most  hard working Americans live paycheck to paycheck
  • Saving for a down payment on a home purchase is rather difficult
  • One of the biggest advantages to qualifying for FHA Loans is that it only requires 3.5% down payment on a home purchase
  • The down payment can be 100% gifted from a family member
  • FHA allows up to a 6% sellers concessions towards home buyers closing costs
  • This can be used for all costs associated with the closing on the home loan
  • Example of closing costs includes the following:
    • title charges
    • attorneys fees
    • recording fees
    • inspection fees
    • pre-paids
    • buying discount points to get a better mortgage rate

Qualifying For FHA Loans Colorado With No Overlays

Nobody ruins their credit on purpose.

  • Majority of consumers are financially responsible
  • There are extenuating circumstances in one’s lives
  • Here are some examples of extenuating circumstances:
    • may lose their business
    • lose their jobs
    • have medical issues
    • go through divorce
    • or other issues where their income streams get interrupted
    • with income interruption, consumers cannot pay their bills on time and due to that their credit gets ruined

Becoming Home Owner In Colorado

Colorado first time home buyers or veteran seasoned home buyers seeking a home loan with bad credit can now qualify for an FHA Loans Colorado:

  • One of the main goals HUD launched FHA Loans was was to promote home ownership
  • Home buyers with prior bad credit such as the following can qualify for FHA Loans Colorado:
    • prior bankruptcy
    • foreclosure
    • short sale
    • deed in lieu of foreclosure
    • These folks get a second chance after re-establishing their credit
    • HUD gives hard working Americans the opportunity to become home owners after bad credit

Minimum credit scores to qualify for a 3.5% down payment home purchase FHA Loans Colorado is 580

  • Home buyers with credit scores between 500 and 579 can qualify for an FHA loan
  • However, a 10% down payment is required along with compensating factors

FHA Loans Colorado With No Overlays

Colorado home buyers with bad credit can qualify for FHA Loans Colorado with no investor overlays with Michael Gracz of Gustan Cho Associates Mortgage Group. Mike Gracz’s Team at Gustan Cho Associates of licensed mortgage loan originators are experts in originating and funding FHA Loans Colorado with no overlays.

  • Over 75% of our borrowers are folks who could not get qualified by other banks and lenders due to their lender overlays
  • A large percentage of Mike Gracz’s clients and realtor partners are from the state of Colorado
  • To get qualified for FHA Loans Colorado with bad credit, apply online now by clicking APPLY ONLINE NOW
  • Complete the four-page mortgage application and start the road to home ownership

Michael Gracz is available 7 days a week, including evenings and holiday. Call Mike or text him for a faster response at 630-659-7644. Or email us at mike@loancabin.com.

Leave A Reply

Your email address will not be published.

Call Now ButtonCALL NOW