The Colorado Housing and Finance Authority (CHFA) has announced a new mortgage product designed to help homebuyers with excellent credit scores avoid having to make a 20% down payment in order to escape costly mortgage insurance fees. The program, called CHFA Advantage, will reward first time homebuyers with credit scores of 700 and above for their strong track record of financial responsibility.
According to the CHFA, the new product enables borrowers to avoid the mortgage insurance costs while only being required to make a 3% 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.
‘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,’ says Cris White, CHFA's executive director and CEO. ‘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. The risk to CHFA is minimal, and the reward to the homebuyers and our economy is significant.’