With the help of an FHA loan, Colorado homebuyers with low credit scores or limited savings can purchase property. These loans, backed by the Federal Housing Administration, have less stringent qualifications than conventional home loans, but limit the amount you can finance depending on where you live. In many Colorado counties, single-family homebuyers can borrow up to $498,257 through an FHA loan, but in pricier spots, like Eagle, Garfield and Pitkin counties, loan limits can reach $1,149,825.
The Federal Housing Administration (FHA) has increased its loan limits for 2023, giving homebuyers in Colorado more purchasing power when using an FHA mortgage. This article explains the new 2023 FHA loan limits for each county in Colorado and what it means for homebuyers
Overview of FHA Loan Limits
The FHA insures mortgages made by approved lenders, allowing buyers to get a home loan with a low down payment of just 3.5%. However, the FHA places limits on the maximum loan amount it will insure in each county, based on median home prices in the area.
For 2023 the baseline FHA loan limit is increasing to $472,030 up from $420,680 in 2022. This 12% increase matches rising home values nationally. In higher cost areas, the new FHA high balance loan limit will be $1,089,300, a 12% boost from 2022’s limit of $970,800.
Why FHA Loan Limits Matter
The FHA loan limits determine the maximum amount you can borrow with an FHA loan in your county. If the home price exceeds the limit, you won’t be able to use FHA financing for that property.
It’s important to know your county’s FHA loan limit before house hunting so you don’t fall in love with a home that your FHA mortgage can’t cover. Exceeding the FHA loan limits means you’ll need a conventional loan with a larger down payment instead.
Colorado’s FHA Loan Limits for 2023
Below are the 2023 FHA mortgage limits for every county in Colorado, as published by the Department of Housing and Urban Development (HUD).
- Adams County: $472,030
- Alamosa County: $410,000
- Arapahoe County: $472,030
- Archuleta County: $410,000
- Baca County: $410,000
- Bent County: $410,000
- Boulder County: $530,000
- Broomfield County: $472,030
- Chaffee County: $410,000
- Cheyenne County: $410,000
- Clear Creek County: $472,030
- Conejos County: $410,000
- Costilla County: $410,000
- Crowley County: $410,000
- Custer County: $410,000
- Delta County: $410,000
- Denver County: $472,030
- Dolores County: $410,000
- Douglas County: $472,030
- Eagle County: $742,000
- El Paso County: $530,000
- Elbert County: $472,030
- Fremont County: $410,000
- Garfield County: $742,000
- Gilpin County: $472,030
- Grand County: $530,000
- Gunnison County: $530,000
- Hinsdale County: $410,000
- Huerfano County: $410,000
- Jackson County: $410,000
- Jefferson County: $472,030
- Kiowa County: $410,000
- Kit Carson County: $410,000
- La Plata County: $530,000
- Lake County: $410,000
- Larimer County: $530,000
- Las Animas County: $410,000
- Lincoln County: $410,000
- Logan County: $410,000
- Mesa County: $410,000
- Mineral County: $410,000
- Moffat County: $410,000
- Montezuma County: $410,000
- Montrose County: $530,000
- Morgan County: $410,000
- Otero County: $410,000
- Ouray County: $530,000
- Park County: $472,030
- Phillips County: $410,000
- Pitkin County: $742,000
- Prowers County: $410,000
- Pueblo County: $410,000
- Rio Blanco County: $410,000
- Rio Grande County: $410,000
- Routt County: $742,000
- Saguache County: $410,000
- San Juan County: $410,000
- San Miguel County: $742,000
- Sedgwick County: $410,000
- Summit County: $742,000
- Teller County: $530,000
- Washington County: $410,000
- Weld County: $530,000
- Yuma County: $410,000
As you can see, FHA loan limits vary significantly across Colorado, with a $332,030 spread between the lowest and highest county limits. It pays to verify your specific county limit before house hunting.
High Balance FHA Loans in Colorado
In certain high-cost counties, you may be eligible to borrow above the standard FHA loan limit by using a high balance FHA mortgage. These feature the higher FHA ceiling of $1,089,300 for 2023.
The following counties in Colorado qualify for the FHA high balance loan limit in 2023:
- Boulder County
- Eagle County
- Garfield County
- Pitkin County
- Routt County
- San Miguel County
- Summit County
So in these pricier real estate markets, FHA buyers can purchase homes up to $1,089,300 with just a 3.5% down payment and FHA financing.
The Impact of Higher FHA Loan Limits
The increased FHA loan limits for 2023 are great news for homebuyers in Colorado. With FHA mortgages, you can purchase a higher priced home than last year with the same low 3.5% down payment.
The new limits also give you more bargaining power. Say a home is listed for $465,000, and the seller won’t come down on price. Last year, that would have exceeded your FHA loan limit, forcing you to use conventional financing. But for 2023, that home price is within your limit, allowing you to proceed with FHA financing.
Just remember that FHA loans require mortgage insurance for the life of the loan. So generally it’s best to refinance to a conventional loan once you have 20% home equity to avoid that ongoing expense.
Alternatives If You Exceed FHA Loan Limits
If you find your dream home exceeds your FHA loan limit for 2023, don’t despair. You have a few options:
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Conventional 97: This program lets you borrow up to 97% of the purchase price and avoid mortgage insurance with just 3% down.
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Piggyback Loan: You combine an 80% first mortgage with a 10% second lien to get 90% financing.
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Down payment assistance: Check if your state or local government provides grants or loans to help cover your down payment, potentially allowing you to put 5% or more down on a conventional loan.
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Low down payment conventional loan: These programs from Fannie Mae and Freddie Mac allow 3% down payments on loans up to $726,525 and have looser credit requirements than FHA.
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Negotiate the purchase price: Ask the seller to come down to your FHA loan limit so you can proceed with your planned FHA financing. Offer to make up the difference by paying closing costs.
The bottom line is that exceeding your FHA loan limits doesn’t preclude you from buying the home. It just means exploring alternative mortgage options to obtain the financing.
The Takeaway
FHA loan limits are rising across Colorado for 2023, giving buyers more opportunity to purchase a home with low down payment FHA financing. Be sure to verify your specific county’s loan limit before starting your home search. The increased limits allow FHA borrowers to obtain mortgages for higher priced homes than last year. Just be aware of alternatives if you find your dream home exceeds your limit and you still wish to proceed.
How to qualify for an FHA loan in Colorado
FHA loans have more relaxed qualification requirements than conventional loans thanks to their government-backed status, but you will still need to meet the following criteria to apply for one:
→ Minimum credit score of 500: You’ll need to put down 10% or more to get an FHA loan if your credit score is between 500 and 579.
→ 3.5% down payment: You can finance all of your home purchase bar this small sum if your credit score tops 580.
→ Maximum debt-to-income ratio of 43%: Lenders will divide your total monthly debt by your pre-tax monthly income to discover how much of your money goes toward debt repayment. The lower that ratio, the less risky a borrower you’re thought to be. The FHA typically approves those with a DTI ratio at or below 43%, although those with a higher ratio may still qualify with a strong enough credit score or large cash reserves.
→ Live in the purchased home: Any property bought with an FHA loan must be used as your primary residence for at least one year. You can’t buy vacation homes or rental properties with this loan.
→ Stable income history: While FHA loans come with no income limits or requirements, you’ll still need to show lenders at least two years of steady past employment through pay stubs, W-2s or 1099s.
→ FHA mortgage insurance: FHA loans come with two extra insurance hurdles: an upfront mortgage insurance premium equaling 1.75% of the total loan, and an annual mortgage insurance premium, which costs between 0.15% and 0.75% of the total loan.
→ Get an FHA appraisal: Any home purchased with an FHA loan must undergo and pass a $400-$700 FHA appraisal verifying the value, condition and safety of the property.
How are FHA loan limits determined?
The FHA revises its loan limits each year to reflect changing housing costs across the country based on a formula outlined in the National Housing Act. Because of this, the maximum amount you can borrow with an FHA loan is always a percentage of the national conforming loan limit set by the Federal Housing Finance Agency for conventional loans – or mortgages that conform to Fannie Mae and Freddie Mac’s guidelines.
In 2024, the largest FHA loan you can get in most counties across the country, known as the loan limit floor, is $498,257 – or 65% of the national conforming loan limit of $766,550. But those living in more expensive areas can borrow far more, up to the ceiling amount of $1,149,825 – or 150% of the same national conforming loan limit.
Of Colorado’s 64 counties, only buyers in three, Eagle, Garfield and Pitkin, can access that top loan amount. Residents of another 25 of its counties, including Boulder, Denver, Park and Summit, will find their FHA loan limit falls somewhere between the floor and ceiling amount, while those in the remaining 36 counties can get FHA loans up to $498,257.
FHA Loan Limits for 2023
FAQ
How much can I get on my FHA loan in 2023?
What is the loan limit for 2024 in Colorado?
What credit score do you need for FHA loan 2023?
What are the new FHA loan limits for 2024?
What is the largest FHA loan you can get in 2024?
In 2024, the largest FHA loan you can get in most counties across the country, known as the loan limit floor, is $498,257 – or 65% of the national conforming loan limit of $766,550. But those living in more expensive areas can borrow far more, up to the ceiling amount of $1,149,825 – or 150% of the same national conforming loan limit.
Can I get an FHA loan in Colorado?
To qualify for an FHA loan in Colorado, your home loan must be below the local FHA loan limits in your area. For 2024, the maximum loan limit in Colorado is $498,257 for a single-family home and $2,211,600 for a four-plex. Limits varies by county. The minimum loan limit is $5,000. Loan limits vary by county and home size.
What are the new FHA loan limits in 2023?
New limits will go into effect in 2023. In most areas, the FHA loan limit will be $472,030, a 12% increase over 2022’s limit of $420,680. In high-cost areas, the limit moves to $1,089,300, a 12% increase over 2022’s $970,800. In some lower-cost areas or those with higher costs of construction, limits will vary.
Where can I find conforming loan limits in Colorado?
Bankrate compiled the conforming loan limits data from Federal Housing Finance Agency and the FHA loan limits from the U.S. Department of Housing and Urban Development (HUD). Find Colorado mortgage rates View the current FHA and conforming loan limits for all counties in Colorado. Each Colorado county conforming mortgage loan limit is displayed.