FHA MORTGAGES

What is an FHA Mortgage?

FHA mortgages are insured by the Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD). Established during the Great Depression in 1934, FHA mortgages have long been a lifeline for first-time homebuyers. Not just that but also those with past financial difficulties such as bankruptcy or foreclosure. For those with lower credit scores you may find lower rates and payments than that of a conventional mortgage. These mortgages are not directly issued by the FHA; instead, they are provided by FHA-approved lenders. Over the years, FHA loan limits have been adjusted to keep pace with rising home prices, making homeownership accessible to more people. With a low down payment requirement of just 3.5%, FHA loans open the door to homeownership for many who might otherwise be unable to afford it.

Benefits of FHA Loans

Flexible Down Payment Options

3.5% Down Payment: Even if you have limited savings, you can still qualify. Gifts and grants from acceptable sources are allowed.
Co-Signers: Family members can co-sign to help you qualify without needing to live in the home.
Gifted Down Payments: You can receive your down payment as a gift from family or other approved sources if you’re struggling to save enough on your own.
Down Payment assistance programs: You can receive down payment assistance from approved sources if you’re struggling to save enough on your own. Bear in mind these may or may not need to be paid back.

Broad Eligibility

No Income Limits: Unlike some programs, FHA loans do not have income restrictions.
Not Just for First-Time Buyers: Repeat buyers can also take advantage of FHA loans.
Works great for self-employed borrowers: Because of its higher tolerances for debt ratios and credit events, FHA can be a powerful loan for self-employed borrowers.
Renovation Loans: The FHA 203K loan allows you to finance home improvements at closing, perfect for fixer-uppers.

Favorable Terms

Competitive Interest Rates: Typically below market rates due to FHA mortgage insurance.
Easier Qualification: More lenient credit and income guidelines compared to conventional loans.
Higher loan limits: FHA loan limits match that of Conventional or VA home loans.
FHA loans are assumable: A buyer can assume your FHA loan in the future. This can be a great benefit as opposed to conventional loans.

FHA Loan Requirements

3.5% Down Payment: Gifts and grants accepted.
No Minimum Reserves Required: No need for large savings after closing.
Flexible Guidelines: More lenient than conventional loans.
Flexible Student Loan Repayment Debt Calculations: This in combination with higher tolerances for debt ratios, really helps.
Down Payment Assistance: Available for those who need it. In Colorado one of the most popular programs is CHFA.
Family Member Co-Signors: Allowed even if they don’t live in the home.
2-Year Waiting Period Post-Bankruptcy: Chapter 7.
Chapter 13 Bankruptcy: Does not disqualify you.
3-Year Waiting Period: Post short sale, deed in lieu, and foreclosure.
Loan Limits: Match conventional and VA loan limits.
Multi-Unit Properties: Buy a 2-4 unit property, live in one, and rent out the others. You will get rent credit to offset the qualifying payment while you house hack with your FHA loan.
FHA 203K Loan: Finance home remodeling costs for purchase or refinance.

FHA Refinance Loan Options

FHA Streamline Refinance

Reserved for Current FHA Borrowers: Streamlined process with no appraisal required. This is also allowed even if your property has become a rental.
Flexible Terms: Change your loan terms without a new appraisal.
Closing Costs: Often lower and included in the new loan (ask about potential increases in lifetime costs).

FHA Cash-Out Refinance

Home Improvements and Debt Consolidation: Use equity to pay off high-interest debt or improve your home.
Borrow up to 80% of Home Value: Tap into substantial equity for various needs.

Why Choose Mortgage Maestro Group?

Mortgage Maestro Group, a local Veteran owned mortgage broker in Denver. As an FHA-approved lender, we have a long history of helping Denver homeowners with FHA mortgages. Ray Williams, the founder, completed his first loan as an FHA loan over 20 years ago. Our team is dedicated to honesty and integrity, ensuring you feel supported and informed throughout the process. Don’t just take our word for it—see what our clients have to say here.

We guide you through every step of home buying or refinancing, providing education and answering your questions so you have an advocate working with you.

Ready to Get Started?

Are you ready to take the next step towards homeownership with an FHA loan? Start by filling out a pre-qualification application here or schedule a call to discuss your affordability here. Let Mortgage Maestro Group help you turn your homeownership dreams into reality.