Residential Mortgage Loans
One of the first steps you’ll need to take when looking at homes in Colorado Springs is to find financing that’s right for you. As you’ll see, not every Springs home loan program is the same, so you’ll want to look into several of the most common programs and talk to a reputable lender (that’s us!) to see which program fits your budget and lifestyle. The links below will help you to explore most of the loan programs at your disposal, and we regularly schedule “options appointments” with new clients to help them review and understand their financing options to make an educated decision about the loan program that will best meet their needs.
One of the most common loan programs, these loans are guaranteed by Fannie Mae and Freddie Mac, who set forth loan guidelines for lenders to follow. These loans offer very good interest rates with various loan terms available (30, 20, 15, and 10-year options) and typically require at least 5-20% down-payments to qualify. This program is normally best for clients with excellent credit and a larger down-payment.
The most popular loan program for first-time buyers and those who need a lower down-payment option. FHA loans require 3.5% down-payment, and are more flexible on credit scores. The full 3.5% down-payment can also come in the form of a gift from a family member. FHA loans require a 1% funding fee (basically pre-paid mortgage insurance) which is rolled into the loan balance and a monthly mortgage insurance fee as part of the monthly payment.
A great loan program for active duty military and veterans of the Armed Forces. This is a very popular loan program especially in our area due to the large military community in Colorado Springs. VA loans are virtually the only loan program still offering 100% financing to eligible military personnel and veterans. VA also charges a funding fee, which is rolled into the loan, and the amounts charged vary from 2.15% of the loan amount for first-time VA users up to 3.3% or higher for repeat users or members of the National Guard. VA waives all funding fee requirements for veterans with a 10% or higher VA disability rating, which is an added bonus for many vets. VA currently offers some of the lowest rates available with no monthly mortgage insurance, making this an appealing option for eligible clients.
Bond/Down-Payment Assistance Programs
El Paso County occasionally offers a local bond program to offer down-payment assistance to first-time buyers at very low rates (recently rates under 4% on 30-year fixed loans). This program normally comes available once/year and is available for a very limited time as the funds in the program are typically used up very quickly.
Additionally, the Colorado Housing and Finance Authority (CHFA) offers a great low down-payment option for both first-time and repeat buyers with as little as $1000 required for down-payment and assistance in the form of a small 2nd mortgage to cover the remainder of the required 3.5% down for a normal FHA loan.
USDA Loans – a program available with up to 100% financing and low rates for buyers purchasing in rural areas. Parts of Eastern El Paso county and most of the counties further east qualify for this program, as does Teller County, which includes Woodland Park
FHA 203K loans – a rehabilitation loan program that allows buyers to borrow up to $35K in additional funds to renovate a home they purchase. There are 2 options available, a “Streamline 203K” that allows for less paperwork (and less money) and a full 203K option that works almost like a construction loan.
There are very few lenders in CO that offer all of these programs, and we are pleased to be one of those lenders. Please call or e-mail with any questions on the programs listed here.