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An FHA loan buys a Colorado home with 3.5 percent down at a 580 credit score, or 10 percent down from 500 to 579, and it is the loan most Front Range first-time buyers close with when their score sits under 680 or their savings under $30,000. The cost is mortgage insurance for the life of the loan at 3.5 percent down, which is why the program is a starting loan and not a forever loan.
This guide covers FHA as it works in Colorado in 2026: the limits by county, the mortgage insurance math, condo approval in Denver, the flip rule, the 203(k) renovation loan on Denver's older housing stock, and how FHA pairs with CHFA and HUD homes. The Kenna Real Estate Group writes FHA offers every month across the Denver metro and knows which listings take them.
The FHA rules a Colorado buyer works with
- Down payment: 3.5 percent at a 580 or higher score; 10 percent from 500 to 579. Most Colorado lenders set an overlay at 600 to 620.
- Gift funds: the full down payment is allowed to come from a relative, employer or down payment assistance program.
- Debt-to-income: 43 percent as the manual standard; higher with an automated approval and compensating factors.
- Occupancy: primary residence only, move in within 60 days, live there at least one year. No second homes, no pure rentals, though a 2-to-4-unit property with the buyer in one unit is allowed.
- Seller concessions: up to 6 percent of the price toward closing costs and prepaids.
- Upfront mortgage insurance premium: 1.75 percent of the loan, financed into the balance.
- Annual mortgage insurance: 0.55 percent of the loan per year on a 30-year loan with less than 5 percent down (0.50 percent at 5 percent down or more) for loans up to the base limit; paid monthly, for the life of the loan at under 10 percent down, or 11 years at 10 percent down or more.
On a $450,000 Aurora or Thornton home with 3.5 percent down, the loan is $434,250 plus $7,599 of upfront premium, and the monthly mortgage insurance is about $203. That $203 is the number to plan an exit around: refinance to conventional once the home reaches 20 percent equity and the score is 700 or higher.
FHA loan limits by Colorado county
FHA sets a limit per county each year, with a national floor for most of Colorado and higher limits in the Denver metro counties, Boulder County and the mountain resort counties (Eagle, Pitkin, Summit, Routt, San Miguel). The Denver metro limit sits well above the national floor because of local prices, and it changes every January. Look up the exact 2026 figure for your county at HUD's FHA mortgage limits lookup before setting a price range; a buyer at the ceiling in Denver County has a different ceiling in Weld or El Paso County.
Buying a Denver condo with FHA
The condo project has to be FHA-approved, or the unit has to qualify for FHA single-unit approval, before the loan funds. Approval looks at the HOA's owner-occupancy rate (50 percent minimum), the share of units behind on dues, commercial space, reserves and any litigation. In the Denver metro, older projects in Capitol Hill, Cheesman Park and Uptown, and many townhome communities in Aurora, Lakewood and Highlands Ranch, are approved; downtown high-rises with heavy commercial space and projects in litigation are not. Search the project on HUD's condo approval list before you tour, and read the Denver condos, townhomes and lofts guide for how Denver HOAs are built. The Colorado condos for sale page is the search.
The 90-day flip rule
A home resold within 90 days of the seller's purchase is not eligible for FHA financing, measured from the seller's recorded deed date to the date of your contract. From day 91 to day 180, a resale priced at more than double the seller's purchase price needs a second appraisal at the lender's expense. Exceptions cover inherited homes, HUD-owned homes, bank-owned homes and employer relocations. On the Front Range this hits flipped bungalows in Denver and Englewood and flipped ranches in Lakewood and Arvada: ask the listing agent for the seller's acquisition date before writing an FHA offer, and write the contract date for day 91 or later when it is close.
The FHA appraisal on a Front Range home
The FHA appraiser values the home and checks HUD's minimum property standards. On Colorado homes the items that come back as repair conditions are: peeling paint on a home built before 1978, a roof with under two years of life or active hail damage, missing handrails on stairs and decks, an inoperable furnace or water heater, a well or septic that fails its test, and bare or damaged exterior wood. The seller fixes them before closing or the loan does not fund. Read the Kenna post on understanding Colorado FHA loans for the appraisal checklist.
203(k) for older Denver homes
The 203(k) is an FHA purchase loan that includes the renovation money in the mortgage, based on the after-repair value. Two versions:
- Limited 203(k): up to $75,000 of non-structural work (roof, furnace, sewer line, electrical panel, kitchen, bath, radon mitigation, paint), no consultant required.
- Standard 203(k): $5,000 minimum, no cap below the county limit, structural work allowed, a HUD-approved consultant manages draws.
Denver's 1890 to 1955 housing stock in Berkeley, Sunnyside, Platt Park, Baker, Five Points and the older blocks of Englewood, Littleton and Arvada is where the 203(k) earns its keep: a $425,000 bungalow with a clay sewer line ($12,000), a 1960s furnace ($7,000), a 60-amp panel ($4,000) and a hail-worn roof ($16,000) closes as a $470,000 loan with the work funded and a contractor's bid in the file. Work has to start within 30 days of closing and finish within six months. The Denver fix and flip guide lists what to check on these homes before the bid.
FHA with CHFA and other Colorado assistance
CHFA (the Colorado Housing and Finance Authority) layers down payment assistance, as a grant or a second mortgage, on top of an FHA first mortgage for buyers under its county income limits with a 620 score and a homebuyer class. metroDPA and city programs in Denver, Aurora, Fort Collins and Colorado Springs do the same. Stacked, a Denver metro buyer closes with $2,000 to $5,000 out of pocket on a $425,000 home. The current percentages are on CHFA's site; the Kenna post on first-time homebuyer programs in Denver lists the programs by name.
FHA loans are assumable
An FHA loan transfers to a qualified buyer at its original rate. A Denver seller with a 2021 FHA loan at 3 percent sells a $500,000 home to a buyer who assumes the $380,000 balance and brings the $120,000 difference in cash or a second loan. The Colorado assumable mortgage guide explains the process, and the Kenna post on FHA assumable homes for sale in Denver is the search.
HUD homes and FHA
When an FHA borrower forecloses, HUD takes the home and sells it through the HUD Home Store, with an owner-occupant priority bidding period before investors. HUD homes are FHA-financeable when the appraisal marks them insurable, and the 203(k) covers those marked insurable with escrow repairs. The Colorado HUD homes guide covers the bidding rules and the Front Range inventory.
FHA or conventional for a Denver first-time buyer
| Question | FHA | Conventional 97 / HomeReady |
|---|---|---|
| Minimum score for the low down payment | 580 | 620, with pricing that improves to 780 |
| Down payment | 3.5 percent | 3 percent |
| Mortgage insurance | 1.75 percent upfront plus 0.55 percent a year, for the life of the loan at 3.5 percent down | PMI priced by score, cancels at 20 percent equity, none upfront |
| Seller concessions | Up to 6 percent | 3 percent at under 10 percent down |
| Condos | Project must be FHA-approved | Lender project review |
| Best fit | Score 580 to 680, thin savings, higher DTI | Score 700 plus, plans to stay past year 5 |
The FHA versus conventional loans for Colorado buyers page runs the full comparison. For financing, the Kenna Real Estate Group works with Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender. You are free to use any lender. Program rules start in the Colorado home financing guide, and the Colorado mortgage pre-approval guide lists the documents the FHA file needs.
Getting an FHA offer accepted on the Front Range
- Full pre-approval with the FHA case already assigned, not a pre-qualification letter.
- Inspect first, then appraise, so repair conditions are known before the appraiser writes them.
- Ask for concessions where the days on market allow; in 2026 Denver metro homes sit 30 to 45 days and a 3 percent concession is routine.
- Skip flips under 91 days and condos off the approved list; the offer dies in underwriting.
The government-backed home buying guide covers FHA and VA side by side, and the first-time home buyer guide for Colorado and Colorado home buyer's guide carry the process to closing. The buyer services page explains what the Kenna Real Estate Group does at each step.
Where to go next
- Government-backed home buying guide: FHA and VA
- Colorado HUD homes guide
- FHA versus conventional loans for Colorado buyers
- FHA versus conventional loans in Denver
- Search every home for sale in Colorado
- Meet the Kenna Real Estate Group agents
Talk to the Kenna Real Estate Group
The Kenna Real Estate Group, Keller Williams DTC in Centennial, writes FHA and 203(k) offers across the Denver metro every month, screens listings for the flip rule and condo approval before a buyer tours, and negotiates the seller concessions that bring cash to close down. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Or search every home for sale in Colorado and ask us which ones take FHA.