Your FHA loan, all on one page

FHA allows 3.5% down at a 580 score and 10% down from 500 to 579; below 500 a file is not eligible. Many lenders set higher minimums, and they differ, so we match you with a lender whose rules fit your file.

With stronger credit, a conventional loan such as HomeReady often costs less over time, because its mortgage insurance can be canceled. Your Mortgage Plan shows both.

FHA sets no fixed maximum for loans its automated system approves; we have seen approvals with all debts up to 57% of income. Manually underwritten FHA loans run 31% for housing and 43% for all debts, and up to 40% and 50% with compensating factors.

A family member who will not live in the home can be a co-borrower, adding their income to help you qualify, and the loan keeps the 3.5% minimum down payment.

Buying with a co-borrower

U.S. citizens and lawful permanent residents are eligible. FHA is for a home you will live in as your main residence.

The upfront mortgage insurance premium is 1.75% of the base loan. Most buyers add it to the loan. If you refinance one FHA loan into another within 3 years, part of it is credited to the new loan.

Loans above $726,200 have higher rates: 0.7% and 0.75% on terms over 15 years.

With less than 10% down, the annual premium stays as long as the loan does. Many owners later refinance into a conventional loan to drop it once they have 20% equity.

When mortgage insurance comes off

In Southwest Colorado, fees usually run about $3,000 to $3,500 in fees, plus prepaid taxes and insurance. Taxes and insurance vary widely from home to home, from about $600 a year in taxes and $800 in insurance to about $3,000 of each, so they move your upfront cash more than the fees do.

FHA lets the seller, builder or agent contribute up to 6% of the price toward closing costs, prepaid items and the upfront premium.

In Montezuma, Archuleta and Dolores counties the one-unit limit sits at the national floor of $541,287; La Plata, Ouray, San Miguel and the Denver metro are higher. Two to four units have higher limits.

Look up a county on HUD's site

3.5% with a 580 score or higher; 10% from 500 to 579. With 10% down, the annual premium ends after 11 years.

A gift needs a letter and a paper trail showing where the money came from. Down payment assistance can also cover it; it is usually a loan secured by a second lien and only sometimes a grant, and we compare your options with and without it before you apply.

Down payment assistance: what it really costs

FHA finances one to four units when you live in one of them. Manufactured homes qualify when built after June 15, 1976, set on a permanent foundation and titled with the land. Rural homes with wells and septic qualify when they meet HUD’s standards.

Manufactured homes, explained

An FHA 203(k) adds the cost of repairs to an FHA purchase or refinance, with the same down payment and credit rules. The work is paid out in draws as it is done.

The appraiser confirms the value and notes anything that affects safety, security or soundness, such as a failing roof or peeling paint on an older home. Required repairs are usually done before closing, or covered by a 203(k).

The Streamline replaces your FHA loan with a new FHA loan, usually without an appraisal or a new income check, when the rate plus mortgage insurance drops enough to be a real benefit.

You must have owned and lived in the home for at least 12 months, with 12 months of on-time payments. A full appraisal is required, and the upfront and annual premiums apply; at 80% of value or less, the annual premium lasts 11 years.

Once the loan is at or below 80% of the home's value, a conventional refinance has no mortgage insurance. Whether it pays depends on the rate and costs; your Mortgage Plan shows the break-even month.