Our Buying Difference

FHA is part of The Department of Housing and Urban Development (HUD) - meaning it is a government insured loan. With the loan, it allows lenders to offer consumers better deals. This includes low down payments, low closing costs, and lower credit requirements.
FHA is a great loan for first time home buyers to utilize. The minimum credit requirement for borrowers is a 580 with 3.5% down and a 500 with 10% down. With this, there are down payment assistance programs to help with upfront costs - including CHFA (Colorado Housing and Finance Authority) Keep in mind, typically lenders have their own credit requirements for FHA - this is why it is crucial to shop around to compare and negotiate terms.

The VA loan is another government-backed home loan. This loan is exclusively only available to active-duty service members and veterans with discharges other than “dishonorable,” and National Guard and Reserve service members with an “honorable” discharge.

As long as the home appraises for the sales price there is no down payment required. There is a VA funding fee - which is a percentage of the sales price - this fee can be waived if eligible - if ineligible it can be wrapped into the loan so there are no upfront costs.

The VA has no minimum credit score - in order to determine your interest rate and to lower risk for the lender - lenders typically have their own credit and income requirements. It is important to always shop around as there are lenders who do have low to no requirements when it comes to credit and income for VA borrowers-

For more information on the VA loan and the home buying process when utilizing a VA loan be sure to download our VA Buyer’s Guide.

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that guarantee a large majority of loans in the U.S. Loans guaranteed by the GSE are known as conventional loans. Since all conventional loans are backed by the GSE - it reduces the risk for the lender which results in better affordability and the option of a 30-year fixed-rate loan for the borrower.

Generally, you will need at least a 620 credit score and a 50% or lower debt-to-income ratio to qualify for a conventional loan.

Rent-to-own programs allow prospective buyers to lease a home of their choice with the option to purchase the home later down the road. This program may make sense for individuals with lower credit or those who are needing time to save money for a down payment. Additionally, it can be a great option for those relocating to Colorado who wants to “try out the home” before committing to buying to make sure they like the home and the area where they live.

It is important to know that there are generally two types of rent-to-own agreements. One is a lease option purchase and the other is a lease purchase program. Home Partners of America is the most common lease option purchase program and Divvy is the most common lease purchase program that services Colorado. The main alternatives are having the option to buy vs an obligation to buy or penalties if you decide not to. To read more about these two programs be sure to visit here: Browse Rent-To-Own Homes

A Non-QM loan is for borrowers with unique qualifying circumstances. With this, it is a loan that does not meet the standards of a qualified mortgage and uses non-traditional methods of income verification. This loan makes the most sense for those who are self-employed (specifically for less than two years), borrowers with significant assets, real estate investors, etc.

Non-QM loans have their own underwriting guidelines to allow the lender to view the borrower’s financial status, credit and overall their ability to repay back the loan. There are many types of Non-QM loan products that various lenders offer including bank statements (typically goes off only a 12-month bank statement), jumbo loans with 10% down, no income investment loans (only takes into consideration the rental income of the property and nothing else), asset-based loans, foreign national loans, interest-only loans, recent credit event loans, and commercial rental property loans.