Who says you can’t buy a house in Colorado Springs? The media would have you think that the entire lending industry has gone into bankruptcy, and that the result of the “sub prime” crisis is going to be that no one can get a loan, and that everyone who has a loan can’t make the payments. NOT TRUE!
First of all, the only loan programs that are really affected by all this sub prime business, are ones that rely on stated income. That means that you have to prove that you can make the payments now, where in the recent past, with decent credit, down payment, etc, you could basically “make up” the amount of income you had. Unemployed, or newly self employed are the ones most affected by this. Secondly, programs made for true credit risks (recent bankruptcy, recent late payments, etc) are still available, but with stricter guidelines or down payment requirements.
Having said that, here are a couple of “tried and true” programs we’ve always (or almost always) had to work with, that had fallen into disuse for a while. Keep in mind these are CIVILIAN programs, VA has been doing ZERO down loans since the end of WWII and continues to be a great option for active duty or former members of the military.
1. FHA. That’s right, good old government guaranteed loans. This program (FHA)goes up to $247,000 loan amount in El Paso County, requires only 3% down, but can be combined with down payment assistance programs such as CHAFA, gifts from relatives, or even Nehemiah gift down payment assistance programs to make this type of loan possible with as little as $0 (ZERO!) of the borrowers own funds (depending on the program). Moreover, it allows the borrower to make payments as high as 41% of their GROSS income, and does not strictly rely on FICO scores (though a 620 FICO seems to help). Still think we don’t have sub prime loans?
2. My Community loans. These loans can go up to 100% of the purchase, and depending on circumstance can go as low as a 580 credit score. You have to make less than $66,000 as a family to get in on this in El Paso County, and it is designed for lower to mid income levels with OK credit (but it sure sounds like a sub prime loan to me!)
3. Flex 97. OK, this is not sub prime, because you may have to have a little better credit for this one, but 3% down conventional financing sounds like a fairly easy program to me. When you consider that to rent a house for $1500 a month costs almost $4500 to move in to begin with (1st months rent, last months rent, plus deposit), for the little bit extra cash, you may as well own a place, right? And your first payment can be due almost 2 months away depending on when you close.

As of today (9/14/07), there are almost 3500 homes in Colorado Springs that are under $250,000 (about half the homes for sale), and almost 1900 of these even have at least 3 beds, 2 baths, and a 2 garage. I think many of you could buy one! If one of these loan programs sounds like it might fit your situation, check with Dana Hines at Colorado Online Mortgage 719-593-8778 for current rates and other program details.