Matthew Hager helps first-time homebuyers in Colorado Springs qualify for FHA loans with as little as 3.5% down and credit scores as low as 580. FHA loans are insured by the Federal Housing Administration and are one of the most accessible paths to homeownership for buyers with limited savings or less-than-perfect credit.
FHA Loan Benefits
Why Choose FHA?
- 3.5% Down Payment — One of the lowest down payment options available
- Credit Score Flexibility — Qualify with scores as low as 580
- Higher Debt-to-Income Ratios — FHA allows higher DTI than conventional loans
- Gift Funds Allowed — Down payment can come from family, employer, or approved sources
- Assumable — Your FHA loan can be assumed by a qualified buyer when you sell
- Bankruptcy & Foreclosure — Shorter waiting periods after credit events vs. conventional
FHA Loan Requirements
- Credit Score: 580+ for 3.5% down (some lenders accept 500-579 with 10% down)
- Down Payment: Minimum 3.5% of purchase price
- Debt-to-Income: Typically up to 43-50% depending on compensating factors
- Occupancy: Must be your primary residence
- Employment: Two years of steady employment or income history
- Property: Must meet HUD minimum property standards
FHA vs. Conventional for First-Time Buyers
| Factor | FHA Loan | Conventional |
|---|---|---|
| Minimum Down Payment | 3.5% | 3-5% |
| Minimum Credit Score | 580 | 620-640 |
| Mortgage Insurance | Life of loan (usually) | Removes at 20% equity |
| DTI Limit | Up to 50% | Up to 45-50% |
| Gift Funds | Allowed for down payment | Varies by program |
Frequently Asked Questions
You can qualify for an FHA loan with a credit score as low as 580 for the 3.5% down payment option. Some lenders may accept scores as low as 500 with 10% down.
The minimum down payment for an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher.
FHA loans require an upfront premium (1.75%, usually rolled in) and an annual premium (0.55%) paid monthly. Unlike conventional PMI, FHA MIP typically lasts for the life of the loan.
No. FHA loans are for primary residences only. You must occupy the home as your primary residence within 60 days of closing.
FHA loan limits vary by county and are updated annually. Most homes in Colorado Springs fall within the standard FHA limit. Check HUD.gov for current limits.
Generally no, with limited exceptions such as job relocation, increase in family size, or co-borrower situations.