Current FHA guidelines, updated from one source.
Read these as program parameters, not an offer: the minimum investment, the credit score for maximum financing, the mortgage insurance premiums, and the ratios, all from one guideline source that this page refreshes from.
Up to 96.5% loan-to-value on a purchase
The purchase leverage is 96.5% loan-to-value, which means the buyer brings a 3.5% minimum investment on the lesser of price and value; closing costs are separate, and sellers may help with those.
Decision score for maximum financing
Eligibility for the full 96.5% leverage starts at a 580 decision score; the score is read as the lowest middle score among the borrowers, and the file is qualified on the whole picture rather than the score alone.
Plus 0.50%–0.55% a year on most thirty-year loans
The upfront premium is 1.75% of the base loan and is financed into the total; the annual premium runs 0.50%–0.55% on most thirty-year loans and ends after eleven years only when the loan started at or below ninety percent loan-to-value.
Housing and total debt, manual reference
Housing and total debt ratios of 31/43 need no compensating factors; higher ratios are approvable with the factors in the ladder below, and files scored by HUD’s automated system follow the system’s finding rather than the manual table.
| Decision score | Housing / total | Compensating factors |
|---|---|---|
| 500–579 or no credit score | 31% / 43% | not applicable — ratios may not exceed 31/43 (energy efficient homes 33/45) |
| 580 and above | 31% / 43% | no compensating factors required (energy efficient homes 33/45) |
| 580 and above | 37% / 47% | one of: verified and documented cash reserves; minimal increase in housing payment; residual income |
| 580 and above | 40% / 40% | no discretionary debt |
| 580 and above | 40% / 50% | two of: verified cash reserves; minimal increase in housing payment; significant additional income not reflected in effective income; residual income |
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV | 0.75% | mortgage term |
Refinances: rate-and-term to 97.75% loan-to-value on a home occupied for the past year; cash-out to 80% after twelve months of ownership and occupancy; streamline refinances of an existing FHA loan without an appraisal. Sellers and other interested parties may contribute up to 6% of the price toward closing costs; the entire minimum investment may be a gift.
Current FHA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · county loan limits apply — ask a Lendmire loan officer for the limit where you are buying · FHA loans are assumable · Lendmire is not affiliated with FHA or HUD.
Informational only; not a commitment to lend, an approval, or a quote. Every figure on this page is a program parameter read from Lendmire’s guideline source, built on HUD’s handbook, and may change without notice; eligibility, the loan amount, the premiums, and the ratios depend on the credit profile, the appraisal, the property, the county limit, and full underwriting. A licensed loan officer provides the terms for a specific loan in writing. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government. Lendmire, LLC, NMLS #2371349. Equal Housing Opportunity.
What an FHA loan is — and how the file is qualified.
An FHA loan is a conventional-looking mortgage with a federal insurance policy attached: HUD insures the lender against loss, and in exchange the program sets the minimum investment, the credit rules, the premiums, and the ratios. The four cards below cover each piece as it applies to a Colorado file.
For the program overview, see Lendmire’s FHA loan program; for help with the minimum investment, the down payment assistance program.
The minimum required investment
Unlike a conventional down payment, the FHA minimum investment can come entirely from an acceptable gift, which is why a Colorado first purchase can close with help from family. The investment is fixed by HUD; what varies is where it comes from.
The decision score sets the leverage
FHA reads credit through the decision score, and the threshold for maximum financing is far below conventional norms. A thin file or a non-traditional credit history is not a bar: it is underwritten manually on rent, utilities, and other payment records, with the ratios held to the base table.
Two premiums: upfront and annual
Mortgage insurance is the price of the leverage. HUD sets both premiums by schedule rather than by credit score, which is why a Colorado buyer with a modest score pays the same premium as one with a strong score; a conventional loan with private insurance prices the score, which is the comparison worth running.
Qualifying ratios and compensating factors
The ratios are a ladder: a base pair with nothing extra, a higher pair with one compensating factor, a pair for borrowers with no discretionary debt, and the top pair with two factors. Files scored by HUD’s automated system follow the system’s finding, which commonly allows more than the manual table.
This is the same arithmetic the lender runs on a Colorado file. The moving parts are the price, which the appraisal may lower, the down payment, which can be a gift, and the rate, which the lender sets at lock; the premium schedule does not move.
Where Colorado’s first-time and moderate-income buyers shop — and how FHA fits.
Affordability in Colorado is a statewide picture made of local ones: values, ownership, and incomes differ from one market to the next, and each shapes the FHA files written there. The figures below come from the U.S. Census Bureau.
Statewide figures provide general market context, not an appraisal or an income calculation. Values and incomes explain why two buyers at the same decision score can see very different files: one buys at the median and qualifies on the base ratios, the other stretches to a higher price and needs a compensating factor.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Where Colorado’s FHA buyers shop — market by market.
Six Colorado markets, each with its own price picture and its own guide. The minimum investment, the decision score, and the premium schedule do not change from one to the next; the prices, the county limits, and the typical files do.
Denver
Denver holds one of the largest pools of owner households among Lendmire’s Colorado markets — roughly 163,555, about 49% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $616,000, median household income near $94,718, population near 719K.
Colorado Springs
In Colorado Springs, owner households number near 123,264, about 61% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $452,600, median household income near $84,818, population near 488K.
Aurora
Roughly 90,683 Aurora households own their homes (62% of the total), which makes it a metropolitan market where FHA purchases close across a wide range of prices and property types. Census context: median value near $469,100, median household income near $88,368, population near 394K.
Lakewood
Lakewood holds one of the largest pools of owner households among Lendmire’s Colorado markets — roughly 40,552, about 58% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $574,400, median household income near $89,792, population near 157K.
Arvada
In Arvada, owner households number near 37,573, about 75% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $632,600, median household income near $117,348, population near 123K.
Fort Collins
Fort Collins holds one of the largest pools of owner households among Lendmire’s Colorado markets — roughly 37,041, about 52% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $577,900, median household income near $85,070, population near 170K.
Statewide, the program rules are the same in every Colorado market: the minimum investment, the decision score for maximum financing, the premium schedule, the ratio ladder, the occupancy rule, and HUD’s property standards. What changes by county is the loan limit, which a Lendmire loan officer confirms for the county where you are buying.
Four ways Colorado buyers put an FHA loan to work.
Colorado borrowers use FHA for a handful of reasons that repeat: the first purchase with a small investment, the purchase on a recovering credit profile, the refinance of an existing FHA loan, and the cash-out refinance on a home with equity.
Take cash out of a home with equity
Cash-out on FHA is a full refinance of the first mortgage at the program’s cash-out leverage after a year of ownership and occupancy. A Colorado owner weighs it against a home equity line, which keeps the existing first mortgage in place.
Buy a condominium in an approved project
A Colorado condominium is an FHA purchase when the project holds HUD approval or the unit qualifies for single-unit approval; the association’s dues enter the ratios, and the appraisal addresses the project as well as the unit.
Buy a small multi-unit home and live in one unit
The multi-unit purchase is where FHA’s leverage does the most work: a Colorado buyer brings the minimum investment on a two- to four-unit property, occupies one unit, and qualifies with the rent from the others counted as HUD allows.
Refinance an existing FHA loan
An existing FHA loan in Colorado can be refinanced on its own record: the streamline path skips the appraisal and most of the documentation, and the rate-and-term path with an appraisal reaches higher leverage when cash to close or equity matters.
Estimate the FHA payment on a Colorado price before requesting a quote.
Estimate the payment before you ask for a quote: the Colorado price, the down payment, the term, the rate, and the escrows are the inputs, and the minimum investment and the premium schedule come from the same guideline source as the snapshot. The result is an estimate, and the rate shown is a published market benchmark, not an FHA offer.
Colorado FHA payment estimate
A Colorado starting point, nothing more: change the price, the down payment, the term, and the escrows to match your purchase.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $540,000 price near Colorado’s median owner-occupied home value (kept where an FHA loan is realistic in most counties), the FHA minimum investment as the down payment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Colorado (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; county loan limits are not checked here. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government.
Same buyer, three very different closings.
Before deciding on FHA, it helps to see what it is not: not the only low-down-payment route, not the only forgiving-credit route, and not the cheapest insurance for a strong profile. The comparison below puts the three next to each other for a Colorado buyer.
FHA, conventional with mortgage insurance, or VA.
A small minimum investment that a gift can cover, a forgiving decision score, ratios that stretch with compensating factors, and HUD insurance priced by schedule rather than by score. The annual premium on a full-leverage thirty-year loan lasts for the term; many borrowers refinance out of it later.
Where FHA charges by schedule, conventional charges by score. A Colorado buyer with strong credit and a small down payment may find the private premium smaller and the payment lower; a buyer with a modest score will not. See Lendmire’s conventional loan program.
VA undercuts FHA for the eligible borrower on the recurring costs: no investment, no monthly premium, no upfront premium, with a one-time funding fee in their place. The questions are eligibility, entitlement, and whether the home meets VA’s property standards. See Lendmire’s VA loan program.
The decision is rarely close once the profile is known. FHA tends to fit the modest score, conventional the strong score with equity to come, and VA nearly any file with eligibility. The comparison is run on the actual numbers, in writing.
What to prepare for a Colorado scenario review.
An FHA file is documented more fully than a streamline refinance; the items below are what a Colorado scenario review typically draws on.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the credit profile, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
The program’s percentages are only part of the answer; these are the details that decide what a Colorado FHA file actually becomes once the appraisal and the credit report arrive.
Use these checks to keep the Colorado file clean and fundable.
A clean Colorado file answers three questions in advance: what decision score, what premium schedule, and whether the property is inside HUD’s rules and the county limit.
- Confirm the score: the lender’s report sets the decision score, the lowest middle score among the borrowers.
- Know the premium: the exit from the premium is a refinance, not an equity threshold.
- Check the limit: the county limit caps the loan amount; ask a loan officer for the current figure.
The decision score decides the leverage
Two borrowers, two sets of scores, one decision score: the lowest of the middle scores. A Colorado couple with one weak file is read on that file, which is why the score is confirmed from the lender’s report before anything is sized or any offer is written.
How long the annual premium runs
The duration of the annual premium is set by the leverage at origination, not by the equity that follows. A Colorado buyer who puts down ten percent or more sees the premium end after eleven years; at the minimum investment it stays for the term on a thirty-year loan.
The county loan limit
FHA caps the loan by county, and the cap changes each year. A Colorado purchase above the county limit cannot close as an FHA loan at the program’s leverage; a larger investment brings the loan under the cap, or a conventional loan takes the file.
Seller contributions and the minimum investment
Two sources, two rules: the minimum investment comes from the buyer or a gift, never the seller; closing costs can come from the seller up to the limit. Structured that way, a Colorado purchase can close with cash to close near the investment alone.
Occupancy and the non-occupying co-borrower
Occupancy is a promise the lender documents and HUD enforces. A Colorado file with a non-occupying co-borrower keeps full leverage when the co-borrower is a family member and the home is a single unit; otherwise the leverage is reduced under HUD’s rule.
From a Colorado pre-approval to keys in hand.
An FHA file moves in a set order: pre-approval on the decision score and the ratios, the contract and the appraisal with HUD’s property standards, underwriting with any compensating factors documented, and closing with the premiums applied. The steps for a Colorado buyer follow.
Pre-approval
The first conversation settles the shape: where the decision score lands, what the ratios support, whether a gift will cover the investment, and whether FHA is the right program next to conventional and VA for the Colorado purchase.
Contract and appraisal
With the contract signed, the lender orders an appraisal from an FHA Roster appraiser, who values the Colorado home and checks it against HUD’s property standards. Seller contributions are checked against the program’s limit, and any condominium project approval is confirmed.
Underwriting
The file is scored by HUD’s automated system or underwritten manually, with income, assets, credit, and any compensating factors documented. Seasoning after a credit event is confirmed from the discharge or transfer papers, and the ratios are measured on effective income.
Closing
Closing is where the premiums become real: the upfront premium is financed into the total loan and the annual premium is part of the payment from month one. The Colorado buyer takes the keys and HUD insures the lender.
A brokerage that matches the program to the buyer.
The value of a brokerage on an FHA loan is comparison and candor: FHA against conventional on the same numbers, the premium’s duration stated plainly, the county limit confirmed before the offer, and the terms in writing.
Three programs, one set of numbers
The comparison on this page is run for real on every Colorado file: the FHA structure next to conventional with private insurance and, where eligibility exists, VA. The written terms follow the comparison.
The premium explained before the offer
No Colorado buyer should learn at the closing table that the premium lasts for the term. The loan officer walks through the upfront premium, the annual premium, and the duration for the leverage chosen, and shows the conventional alternative on the same numbers.
Licensed, consumer-purpose, in writing
The parameters on this page are HUD’s and the wholesale overlays’; the terms for a specific Colorado loan come from a licensed loan officer, in writing, after the review. Lendmire is a broker, never the lender, and not affiliated with the federal government.
Trusted by first-time buyers & families alike.
Colorado FHA loan FAQs
The questions below come up on nearly every Colorado FHA conversation. The answers are general; the figures in the snapshot above are the program’s current parameters.
What is an FHA loan, and who is it for?
An FHA loan is a mortgage insured by the Federal Housing Administration, part of HUD: the lender makes the loan, HUD insures it against loss, and in exchange the program sets a small minimum investment, a forgiving credit threshold, ratios that stretch with compensating factors, and mortgage insurance premiums that fund the insurance. It is for owner-occupied homes of one to four units.
How much do I need to put down on an FHA loan in Colorado?
HUD sets the minimum investment as a small share of the price or value, whichever is lower; the snapshot and the calculator show it on a Colorado price. The whole investment can be a gift from a family member or another acceptable donor.
What credit score do I need for an FHA loan?
Maximum financing opens at the decision score shown in the snapshot, which is the lowest of the borrowers’ middle scores on the lender’s report. HUD’s rules allow lower scores at reduced leverage, but the wholesale programs behind these pages start at the threshold, so that is the working floor in Colorado.
How does FHA mortgage insurance work, and how long do I pay it?
Upfront and annual. The upfront premium is financed; the annual premium is monthly and depends on the term, the leverage, and the loan size. At the minimum investment on a thirty-year loan it stays for the term, which is why many Colorado borrowers plan to refinance into a conventional loan later.
What is the FHA loan limit in Colorado?
Ask a loan officer for the county’s current limit; it changes yearly and by unit count. The limit caps the loan amount, so a Colorado purchase above it is still possible with a larger investment or on a conventional loan.
Can I use an FHA loan to buy a condominium?
In an approved project or through single-unit approval. A Colorado buyer under contract on a condominium should have the lender check the status early, because a project with neither cannot close as an FHA loan.
Can I get an FHA loan after a bankruptcy or foreclosure?
FHA is often the first program available after a bankruptcy or foreclosure. The seasoning rules are specific, the exceptions are real, and recent housing lates are the thing the program does not forgive.
What debt-to-income ratio does FHA allow?
The reference pair in the snapshot with nothing extra, higher pairs with one or two documented factors, and a special pair for borrowers with no discretionary debt. Effective income is the base, and the lender documents it.
Do I have to live in the home to use an FHA loan?
Yes, as a principal residence, occupied within two months of closing and for at least a year. A non-occupying family member can co-sign; the occupying borrower is the one who lives there.
Is an FHA loan assumable?
Yes. FHA loans can be assumed by a qualified buyer, subject to the lender’s approval of the assumptor’s credit and income. In a market where rates have risen, an assumable FHA loan can be a selling point for a Colorado home.
A Colorado FHA loan sized to the price, the score, and the ratios.
Enter your Colorado figures in the calculator, then request a review. The minimum investment, the premiums, the ratios, and the county limit are confirmed against the program rules, and the terms come in writing from a licensed loan officer.
This guide covers Colorado — for the program overview, see Lendmire’s FHA loan program.
All Colorado city guides (6): Arvada · Aurora · Colorado Springs · Denver · Fort Collins · Lakewood
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans