FHA Or Conventional For Cherry Creek Condos?

Trying to decide between FHA and conventional financing for a Cherry Creek condo? You are not alone. With higher price points, notable HOA dues, and mixed-use buildings, the right loan in Cherry Creek often depends on the building as much as your profile. In this guide, you will learn how FHA and conventional loans compare, which building factors matter most, and the steps to take before you write an offer. Let’s dive in.

FHA vs conventional: what matters in Cherry Creek

Cherry Creek offers boutique and luxury condo options with amenities, professional management, and active HOAs. Those benefits can come with higher dues and complex ownership structures that affect loan eligibility. Some buildings may be considered non-warrantable because of investor concentration, commercial space, or short-term rental policies.

Because of that, you should evaluate both your loan program and the building’s approval status in parallel. Your best path is to check project eligibility early, then compare total monthly cost including HOA dues, taxes, insurance, and mortgage insurance.

FHA at a glance

• Minimum down payment: 3.5% if your credit score is at least 580; borrowers with scores 500–579 typically need 10% down. These standards come from HUD’s FHA guidance.
• Upfront mortgage insurance: UFMIP is 1.75% of the base loan amount and can be financed into the loan. See HUD’s page on FHA premiums for details: FHA mortgage insurance premiums.
• Annual MIP: Required on most FHA loans. If your original LTV is over 90%, MIP usually lasts for the life of the loan; if 90% or below, it typically lasts 11 years.
• Condo approval: FHA generally requires the project to be on HUD’s approved list. Limited single‑unit approvals exist for certain owner-occupied purchases but come with stricter documentation.

Why buyers choose FHA in Cherry Creek: the lower down payment can make higher-priced units more attainable. The tradeoff is ongoing mortgage insurance and the need for project approval, which can rule out some buildings.

Conventional at a glance

• Down payment: Some programs allow as little as 3% for eligible borrowers, but condos often require higher down payments, especially in urban buildings or if the project is non-warrantable. Many buyers plan for 10% to 20%.
• Private mortgage insurance (PMI): Required above 80% LTV. PMI pricing varies by credit score and down payment. Learn how PMI works from the CFPB: What is private mortgage insurance?
• PMI cancellation: PMI can usually be removed at 80% LTV on request or automatically at 78% per the Homeowners Protection Act. See the CFPB’s guidance on how to cancel PMI.
• Project eligibility: Conventional loans favor “warrantable” projects that meet Fannie Mae or Freddie Mac standards. Non-warrantable projects may still qualify through portfolio programs but often need larger down payments and stronger reserves.

Why buyers choose conventional: PMI can be cheaper than FHA MIP over time and can be canceled, which may lower your long-term monthly costs.

Project approval and warrantability

Start by checking whether a building is eligible for the program you want.

• FHA maintains a searchable list. Use the HUD condo approval lookup to see if a project is FHA-approved.
• For conventional loans, lenders reference agency standards and conduct project reviews. See Fannie Mae’s project eligibility resources for a sense of what they evaluate.

Common reasons a project is considered non-warrantable include significant commercial space, high investor or short-term rental concentration, ongoing litigation, single-entity ownership of many units, or low reserves. These are more common in mixed-use and amenity-rich urban buildings like those found in Cherry Creek.

How HOA health affects your loan

Lenders underwrite both you and the building. Expect them to review:

• HOA dues level and stability, since dues are part of your qualifying payment.
• Budget and reserves, including reserve studies and recent balance sheets.
• Any pending or material litigation that could affect finances or maintenance.
• Insurance coverages, including master policy and fidelity coverage.
• Special assessments that are recent, pending, or frequent.
• Rental and occupancy mix and whether it meets agency thresholds.

If red flags show up, agency financing can stall. Your lender may pivot to a portfolio option, often with higher down payment requirements.

Compare monthly cost the right way

When you compare FHA and conventional, look beyond the rate. Build a full monthly picture:

• Principal and interest based on your quoted rate and amortization.
• Property taxes and homeowner’s insurance.
• HOA dues for the specific unit and building.
• Mortgage insurance: FHA annual MIP plus financed UFMIP versus conventional PMI that may be cancelable.

Run at least two or three scenarios, such as FHA 3.5% down, conventional 10% down, and conventional 20% down, to see how cash-to-close and monthly costs shift.

Quick decision path

1. Verify whether the building is eligible for your target loan. Check FHA’s list for FHA and ask your lender to confirm Fannie/Freddie project eligibility.
2. If not eligible, ask your lender about single‑unit approval or portfolio options.
3. Compare total monthly cost for FHA and conventional, including HOA dues and mortgage insurance.
4. Factor in your time horizon. If you plan to build equity or refinance, conventional PMI that cancels may be a long-term advantage.
5. If any HOA risks exist, gather documents early and review with your lender.

Documents to request early

Ask your agent and lender to collect these items right after going under contract, and sometimes even before:

• CC&Rs, bylaws, and condo declaration.
• Current budget, balance sheet, and any reserve study.
• Recent HOA meeting minutes.
• Master insurance policy and declarations page.
• Lender’s condo questionnaire completed by the HOA.
• Written disclosure of any litigation, special assessments, or major repairs.

These documents help your lender confirm project eligibility and keep your financing timeline on track.

If the building isn’t approved

You still have options:

• Portfolio loans from local or national lenders that accept non-warrantable condos.
• Larger down payment and additional reserves to meet lender overlays.
• Jumbo financing for higher-priced purchases, subject to condo requirements.
• Bridge or cash strategies if available.
• Contract terms that allow time for project review and financing approval.

If you qualify for assistance, explore whether state programs can help with down payment or rate options. The Colorado Housing and Finance Authority provides information on available programs: CHFA homeownership resources.

Timeline and contract tips

If a project is already approved, verification is quick. If your lender must complete a project review or single‑unit approval, it can take several weeks. Build that time into your financing and HOA review deadlines and avoid short inspection-to-closing windows when possible.

Next steps in Cherry Creek

The best move is to pair a condo-savvy agent with an experienced lender before you shop. Identify target buildings, check project eligibility, and build side-by-side cost scenarios so you can act fast when the right unit hits the market. If you want a clear plan, we are ready to help you screen buildings, coordinate with your lender, and compare FHA and conventional paths for your goals.

Ready to map your financing strategy and building short list? Connect with Hector Murguia for a Cherry Creek–focused consult.

FAQs

Can I use FHA to buy a Cherry Creek condo?

• Sometimes. If the building is on HUD’s approved list or qualifies for limited single‑unit approval for owner-occupants, FHA may work; otherwise, consider portfolio options.

Is FHA cheaper monthly than conventional for condos?

• It depends. FHA’s 3.5% down lowers upfront cash, but UFMIP and annual MIP can raise long-term cost compared with conventional PMI that can be canceled.

What down payment do I need for a Cherry Creek condo?

• FHA typically requires 3.5% down with qualifying credit; conventional condo loans may need 10% to 20% if the project is non-warrantable or lender overlays apply.

How do HOA dues affect my loan approval?

• Lenders include dues in your qualifying payment, which can lower your maximum loan amount; they also evaluate the HOA’s reserves, budget, and any litigation for project eligibility.

What if the building has litigation or low reserves?

• Agency financing may not be available; some lenders offer portfolio loans with higher down payment or reserve requirements to offset project risk.

How long does a condo project review take in Denver?

• If the project is already approved, it is quick; if a full review or single‑unit approval is needed, plan for several weeks and build that time into your contract deadlines.

Where can I check condo approval status?

• Use HUD’s condo approval lookup for FHA and ask your lender for Fannie Mae project eligibility confirmation; keep copies of the condo questionnaire and HOA documents for underwriting.