2023 COLORADO DOWN PAYMENT ASSISTANCE PROGRAMS
NEED HELP WITH DOWN PAYMENT?
No worries, we can help! There are lot’s of programs available for Colorado residents who need help with their down payment. A lack of down payment should never stop someone from purchasing a home and we are here to help! Programs are typically split between Statewide and local City programs. Down payment assistance programs still have credit score requirements, income limits, and other restrictions.
HOW DOWN PAYMENT ASSISTANCE WORKS
Down payment assistance programs are basically regular fixed FHA and/or conventional loans with an additional 2nd mortgage or grant to help cover the down payment and in some cases closing costs. Interest rates can be as little as 0% APR and often monthly payments are not required. Some programs offer grants which do not need to be paid back at all. Having a decent credit score is very helpful but not always required. Alternative credit such as rent, utilities, cellphone bills, can be used for individuals who lack tradition credit. Homebuyers will typically be required to invest $1,000 up to 1% of the purchase price.
CHAC (Colorado Housing Assistance Corporation)
CHAC STATEWIDE PROGRAM (Excludes Denver & Jefferson County)
- 6% of the purchase price with loans up to $15,000 – amortized over 360 months.
- Available statewide in Colorado
- 580 minimum credit score (Case by case)
- 3% interest rate paid back monthly.
- Combined with FHA 1st mortgage.
- Borrower must contribute $1,500 towards the transaction.
- Property must NOT have been tenant occupied for the previous 90 days prior to purchase unless the tenant is the buyer.
- Allows alternative credit for borrowers with no credit scores (Rent, Utilities, Cellphone, etc.)
- Must be first-time homebuyer (Have not owned a home in past 3 years)
INCOME LIMITS STATEWIDE PROGRAM
| 1 | 94,400.00 |
| 2 | 107,850.00 |
| 3 | 121,300.00 |
| 4 | 134,800.00 |
| 5 | 145,600.00 |
| 6 | 156,400.00 |
| 7 | 167,200.00 |
| 8 | 178,000.00 |
CHAC STATEWIDE 5 YEAR DEFERRAL PROGRAM (Excludes Denver & Jefferson County)
Basically the same program as above but the 2nd mortgage has no monthly payments for 5 years. After 5 years, borrower will start making payments at 5% interest over a 25 year period. This program also has more conservative income limits.
Household Size (Not borrowers going on the loan but total people who will be living in the home)
1 Person – $62,600
2 People – $71,550
3 People – $80,500
4 People – $89,400
5 People – $96,600
6 People – $103,750
7 People – $110,900
CHAC PROGRAM FOR DENVER & JEFFERSON COUNTIES
Same guidelines as the Colorado statewide program but strict income limits and different payback terms.
- 6% of the purchase price with loans up to $15,000
- Allowed to cover half the down payment plus closing costs but total cannot exceed the lesser of 5% of the purchase price or $15,000.
- Option 1 – 2% interest rate paid back monthly over 30 years.
- Option 2 – Payments deferred for 5 years. After 5 years, 6% interest rate paid back over 25 years.
1 Person – $62,600
2 People – $71,550
3 People – $80,500
4 People – $89,400
5 People – $96,600
6 People – $103,750
7 People – $110,900
WHAT MAKES THE CHAC PROGRAM DIFFERENT
CHAC does not offer 1st mortgages so we can combine the CHAC assistance with our low interest rate FHA loan. Other programs such as CHFA are great but the interest rates on the 1st mortgage will be higher because we have to originate the 1st and 2nd mortgage through CHFA. The downside of CHAC is slightly more conservative income limits and debt to income ratio requirements.
HOW TO APPLY FOR CHAC
We gather the borrowers documents and submit to CHAC for the initial preapproval. Meanwhile we do our preapproval for the 1st mortgage. Typically takes up to 7 days for CHAC to issue their preapproval. Most common items required upfront are tax returns, W2s, and bank statements.
CHFA (Colorado Housing Authority)
FirstStep Plus
- Statewide across entire State of Colorado
- 96.5% FHA 1st mortgage + 4% 2nd mortgage
- Available statewide in Colorado.
- 620 minimum credit score.
- Zero-percent 2nd mortgage with no monthly payments
- 1st and 2nd mortgage are underwritten together through CHFA
- Borrower must contribute $1,000 towards the transaction (Gift allowed)
- Must be first-time homebuyer (Have not owned a home in past 3 years) Exceptions to this rule for qualified veterans or borrowers purchasing a targeted area.
- Detailed FirstStep Matrix
SmartStep Plus
- Statewide across entire State of Colorado.
- 96.5% FHA 1st mortgage + 3% non repayable grant or 4% 2nd mortgage.
- $148,120 Statewide income limit regardless of County and household size.
- Available statewide in Colorado.
- 620 minimum credit score.
- 1st and 2nd mortgage are underwritten together through CHFA.
- Borrower must contribute $1,000 towards the transaction (Gift allowed)
- Not required to be first-time homebuyer.
- Detailed SmartStep matrix
Preferred Plus
- Statewide across entire State of Colorado.
- 97% conventional 1st mortgage + 4% 2nd mortgage. EX: 100,000 purchase price would be $97,000 1st mortgage + $4,000 2nd mortgage to cover the down payment. Additional 1% will go towards closing costs.
- 2nd mortgage is a zero interest rate loan and requires no monthly payments.
- $148,120 Statewide income limit regardless of County and household size.
- Available statewide in Colorado.
- 620 minimum credit score.
- 1st and 2nd mortgage are underwritten together through CHFA.
- Borrower must contribute $1,000 towards the transaction (Gift allowed)
- Not required to be first-time homebuyer.
- Detailed Preferred Plus Matrix
- CHFA tends to have higher rates versus other local City or County programs specifically for 1st mortgages. With other programs, we can combine our
own 1st mortgage along with the assistance program that the borrower qualifies for. With CHFA, we have to do the 1st mortgage along with the down payment assistance through CHFA so we have less control over the rates on the 1st mortgage. Meaning we can typically offer a better loan to a borrower if they’re eligible for an alternative program like CHAC.
- With a CHFA loan, we have to charge a 1% origination charge which increases the closing costs. For example, on a $350,000 loan, we have to charge a $3,500 origination fee. This is not the case with regular conventional, FHA, VA or USDA loans. We can also avoid origination charges if we’re able to qualify the borrower for a local City or County down payment assistance program.
HOW TO APPLY FOR CHFA
We do the initial pre-approval. The loan will be sold to CHFA at time of closing. During the pre-approval process, we will discuss the details with the borrower so they understand what documents are required and what is needed to complete the loan process.
AURORA HOAP (Home Ownership Assistance Program)
Purchase a home in Aurora, CO with only 1% down. Utilize a regular FHA loan plus an interest free 2nd mortgage up to $10,000. The 2nd mortgage can be used towards down payment and/or closing costs.
- Must be first-time homebuyer
- Must contribute 1% minimum contribution
- No monthly payments are required but the loan must be paid back at time of refinance or sale
- Must attend first-time homebuyer class
- Income limits below do apply
| Number in household | Maximum Income allowed |
| 1 person | $62,600 |
| 2 people | $71,550 |
| 3 people | $80,500 |
| 4 people | $89,400 |
| 5 people | $96,600 |
| 6 people | $103,750 |
| 7 people | $110,900 |
| 8 people | $118,050 |
WHAT MAKES THE HOAP PROGRAM DIFFERENT
Similar to the CHAC program, Aurora HOAP only offers down payment assistance and does not originate 1st mortgages. This allows us to combine our low rate FHA loan along with HOAP assistance loan.
Visit the Aurora HOAP website for more information or feel free to give us a call if you have any other questions.
HOW TO APPLY FOR HOAP
Contact us to get pre-approved. We will prequalify the borrower for the HOAP down payment assistance loan and issue a pre-approval for the first mortgage.
