The Colorado Housing and Finance Authority (CHFA) has introduced a new mortgage program to help homebuyers with excellent credit scores avoid having to make a 20 percent down payment on their purchase to avoid costly mortgage insurance fees.
The program is called “CHFA Advantage” and it will reward first-time Colorado homebuyers with credit scores of 700 and above for their track record of financial responsibility.
CHFA estimates that the program will help 800 Colorado households in 2012 and 2013. According to the CHFA, for every 100 households served, $20.5 million in direct economic impact will be created and 104 jobs will be supported.
According to a CHFA press release, historically, CHFA’s borrowers with a credit score of 700 or more typically have a foreclosure rate of less than one-half of one percent. Cris White, CHFA’s executive director and CEO explained that these borrowers have demonstrated that they do what it takes to pay their bills in-full and on-time. “It is critical that we help more Coloradans with strong credit achieve homeownership affordably,” White said. “The risk to CHFA is minimal, and the reward to the homebuyers and our economy is significant.”
Mortgage insurance is typically required for homebuyers who can’t make a 20 percent down payment on the purchase of their home, regardless of their credit score.With CHFA Advantage, borrowers can avoid the mortgage insurance costs, while being required to make only a 3 percent down payment. For example, with CHFA Advantage, the down payment on a $150,000 home would be $4,500. In the same scenario without CHFA Advantage, borrowers would have to pay $30,000 down in order to avoid mortgage insurance.
To be eligible for the program, borrowers must be a first-time homebuyer, have a minimum 700 credit score, meet qualifying income and home purchase price limits, make at least a three percent down payment and take a CHFA-approved homebuyer education class. Call us at 720-932-4401 for more information!