Good credit gives homebuyers advantage

The Colorado Housing and Finance Authority, or CHFA, announced a new program Thursday that will allow certain homebuyers with strong credit scores to shell out less money for a down payment and avoid mortgage insurance fees.

CHFA Advantage will offer some borrowers with a credit score of at least 700 a 30-year fixed-rate mortgage with 3 percent down and no mortgage insurance fees.

Mortgage insurance typically is required for homebuyers unable to make a 20 percent down payment toward the purchase of their home. Those insurance costs typically range from $100 to $200 a month, according to the authority, and must be paid until homeowners accrue 20 percent equity in their home.

Under the new program, someone who buys a $150,000 home would put down $4,500 as a down payment and pay no mortgage insurance, rather than $30,000 to avoid mortgage insurance.

“For those homebuyers who have demonstrated they’re good with their financial track record and that they pay their bills on time, they should be able to use that money they would be paying for that increased down payment or that mortgage insurance and put that into their savings or put that back into the economy in a more meaningful way,” authority spokeswoman Jerilynn Martinez said.

Colorado Housing and Finance Authority estimates the new program will help 800 Colorado households this year and next year.

To be eligible for CHFA Advantage, borrowers must:

■ Be a first-time homebuyer, an eligible veteran or a non-first-time homebuyer purchasing in a so-called “targeted” area;

■ Have a minimum 700 credit score;

■ Contribute at least 3 percent of the loan amount toward their down payment; and

■ Complete a CHFA-approved homebuyer education class.

Income and purchase price limits vary by county. In Mesa County, the income limit is $74,100 for a one- or two-person household and $85,200 for a family of three or more. The purchase price limit is $342,600.

Income and purchase price limits are higher for homebuyers who live in “targeted” areas.

In those areas, the income limit is $88,900 for a one- or two-person household and $103,700 for a family of three or more. The purchase price limit is $417,000.

Martinez said the U.S. Department of Housing and Urban Development defines “targeted” areas as those where the government would like to see additional economic investment.

Martinez emphasized that the purchase price limit is far above the average price of a home purchased by those who take advantage of authority programs.

To find out more, visit www. or call 800-877-8450.


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