Down Payment Assistance

Down Payment Assistance for First Time Home Buyers in Colorado

Has the dream of home ownership been a distant reality because of lack of funds? No need to wait any longer. Colorado has a lot of options for assistance with purchasing a home. All of which are unique in their own way with one goal of making homeownership more affordable and attainable for first time homebuyers.

I have been working in the mortgage industry for over 20 years now and have seen many programs come and go. But, now is the time to buy with so many options available based upon income, location and specific needs.

Colorado Housing And Finance Authority

This program has been around for as long as I have been doing loans and has changed tremendously over the years. It is a fantastic program because it has been perfected to be tailored to the homebuyer’s specific needs and qualifications. The various programs all have different guidelines and requirements based upon credit score and income. The minimum score required is a 620, except for Preferred and Preferred Plus, which require a 680 credit score.

The way it works is CHFA will provide the financing for a first mortgage and then provide grant funds or a zero-percent second mortgage loan funds for up to 5% of the first loan amount to be used towards downpayment or closing costs. In addition, If additional closing costs are needed, CHFA’s optional Borrower Premium program gives the lender a credit in the amount of 1 percent of the first mortgage loan amount. The lender will apply this credit towards the closing costs on the CHFA first mortgage, reducing the amount of money that are required to bring to the closing table.  A higher interest rate will apply.


  1. Maximum income limits are higher than most other DPA programs offered in Colorado
  2. Minimum investment required is $1000 and can be in the form of a gift.
  3. CHFA Smartstep Plus, Preferred Plus, and HomeOpener Plus can be in the form of a grant that does not have to be paid back upon sale or refinance of the property at a later date.
  4. Lender paid Mortgage insurance is an option on select programs. This will often lower the monthly payment overall.


  1. Higher interest rates then traditional FHA or conventional financing.
  2. Income limits could eliminate some First Time Homebuyers from the program.

As with most down payment assistance programs, CHFA does have income limits based upon number of people in household and location of the property. Check the income limits for the area you are wanting to purchase by clicking here.

CHFA also requires all borrowers to take a First Time Homebuyer Education class before closing on the new home. They offer free in person classes all over the state and many times throughout the month.  Online education is also available for $99.


Colorado Housing Assistance Corporation is a simplified version of CHFA. There is a minimum contribution of $1000, and it CANNOT be a gift. But, it is a silent second lien mortgage that is recorded against the property and must be repaid if the home is ever sold or the first mortgage is refinanced.

The requirements for this program are much harder to meet due to the low income limits and the high home prices in Denver. For example, for a household of 4, the maximum income limit outside Arvada, is $64,100. With higher home prices in Denver metro area, it makes it very difficult to qualify a borrower under this program.

Repayment is based upon the location of the property and best option available to the homebuyer at the time of loan acquisition.

First time Hombuyers are also required to take a CHFA or CHAC approved in person course.


  1. It is a second mortgage lien that must be paid off, eventually.
  2. Income limits are extremely low
  3. First time homebuyer education requirement cannot be met with online education.
  4. $1000 required downpayment funds cannot be in the form of a gift.
  5. Cannot use CHAC funds if the property is already tenant occupied. Meaning, if the homebuyer currently rents the home, he/she cannot acquire CHAC downpayment funds.


  1. Homebuyer that has utilized CHFA DPA assistance in the past. CHFA only allows a homebuyer to use CHFA funds one time. CHAC provides a good alternative to CHFA.

Freddie Mac 1% Down Program

  • I love this program. It is a great alternative for the first time borrower that exceeds the income and housing limits set by CHFA and CHAC downpayment assistance because 6 additional metro Denver counties have been added to Colorado that fall within the NO AMI limits guidelines. They are:
  • Adams County, CO*
  • Arapahoe County, CO*
  • Boulder County, CO*
  • Denver County, CO*
  • Gilpin County, CO*
  • Jefferson County, CO*

This program is a little more difficult to qualify for because of the minimum credit score requirement of 700 (update 07.21.2017 minimum 720) and a maximum debt ratio of 43% (update 07.31.2017 50%)

First time Home Buyer education is required from one of the following: 1) an online homeownership education program developed by mortgage insurance companies 2) homeownership education programs that meet the standards of the National Industry Standards for Homeownership Education and Counseling, or 3) programs using Freddie’s CreditSmart.


  1. No income limits in 4 underserved census tract areas of Colorado.
  2. Mortgage insurance can be paid by the lender with a higher interest rate. This helps to reduce the overall monthly mortgage payment.
  3. 1% downpayment funds can be in the form of a gift. (Update 07.21.2017.  Gift longer accepted.  Must be seasoned funds.)
  4. 2% lender downpayment contribution with no repayment requirement. (update 07/21/2017: up to $5000)
  5. Great interest rates compared to CHFA.
  6. Reduced mortgage insurance rates.


  1. If property does not fall within the designated Freddie Mac No AMI limits counties, homebuyers are limited with income qualifications, as with other downpayment assistance programs.
  2. Minimum required credit score is 720.
  3. Minimum downpayment contribution is 1% of the purchase price.

Other Programs In Colorado to Consider For Downpayment Assistance

There are several other programs worth taking a look at, but are not listed in detail because they are more city and/or county specific.  Each program has its own guidelines, limits and qualifications.  If one is of interest, please call or email me with your questions and I would be happy to get more details to find out if it is a good fit for your specific needs.  Here is the list of other programs to consider when shopping downpayment assistance in Colorado.

  1. Aurora Home Ownership Assistance Program or Aurora HOAP:  This program follows CHAC guidelines.  Again has strict income limits.
  2. Douglas County Housing Partnership: Again, very similar to CHAC guidelines with income limits.  Purchase price cannot exceed $300,000.
  3. Larimer Home Ownership Program or LHOP: Requires 1% of borrower’s own funds into the purchase.
  4. Summit Combined Housing Authority or SCHA: It is a silent second mortgage recorded against the property at 2% interest rate.

There are many other programs available that have not been listed here.  Each and every one of them has Pros and Cons, so it is critical that you call me or do the research to find out which program best fits your needs.

I am available most evenings and weekends when your local banker is not.  So, feel free to call, text, 303-549-0891 or email me, anytime.  I will get back with you as soon as I am available.

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