Colorado First-Time Homebuyer Down Payment and Mortgage Assistance Programs [2018]

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If you are a current renter and think that buying a home is financially out of reach, you aren’t alone. However, the truth is that there are several programs and incentives available for the Colorado first-time homebuyer (and those that have previously owned a home) that make buying a home not only possible but, in most cases, less expensive than renting.

Two of the most common myths around buying a home is that you need excellent credit and that there is a large down payment involved. Here, we will dispel these myths by showing you seven of the down payment grants and mortgage assistance programs available for first-time homebuyers in Colorado. 

Many people don’t know about these programs and therefore they do not even consider homes for sale as a viable option. We always recommend talking to a trustworthy lender, even if you’ve looked at the initial eligibility requirements and don’t think you qualify. They will know about the intricacies of calculating factors like debt-to-income ratio and will help you find the best options for you.

Additionally, it’s important to note that, due to changes in the mortgage industry, many of these down payment grants and mortgage assistance programs are available to anyone, including those that have previously owned a home and even currently own a home.


The Colorado Housing and Finance Authority (CHFA) Programs

Who it’s for: first-time buyers, previous homeowners, and qualified veterans

Terms: a 30-year, fixed rate mortgage that can be paired with a 4% downpayment grant or a 5% zero interest second mortgage (silent second) that can help with down payments, closing costs and more

Qualified areas: statewide

Minimum required credit score: 620

Minimum required down payment: $1,000

More details: CHFA offers numerous financing programs and opportunities to accommodate an array of today’s homebuyers. To be eligible to receive financing, borrowers must have a credit history and take a homebuyer education course (in person or available online).


FHA Metro Mortgage Assistance Plus Program

Who it’s for: first-time buyers and low and moderate income families

Terms: down payment assistance and possible eligibility for a grant that will cover up to 4% of a borrower’s 30-year, fixed rate home loan

Qualified areas: Denver, Arvada, Aurora, Bennett, Boulder, Brighton, Broomfield, Castle Rock, Centennial, Commerce City, Dacono, Edgewater, Englewood, Firestone, Golden, Lakewood, Littleton, Parker, Sheridan, Thornton, Westminster and Wheat Ridge

Minimum required credit score: 640

Minimum required down payment: 0.5% of total mortgage

More details: borrowers should have a suggested debt-to-income ratio of 45% or less and the home purchased must be a single-family detached home, duplex, condo or townhome 


El Paso County Turnkey Bond Program

Who it’s for: first-time homebuyers (“first-time homebuyers” is defined as someone that has not owned a home in the last three years) 

Terms: a 30-year mortgage loan from participating lenders with a down payment grant of 3% to 4% of the mortgage, with no repayment needed

Qualified areas: El Paso County

Minimum required credit score: 640

Minimum required down payment: 0 to .05% of the sales price

More details: Most participating lenders are found locally in El Paso County, Colorado. 


NEWSED Down Payment Assistance

Who it’s for: first-time buyers

Terms: applicants can receive up to $8,000 for down payment, closing costs, mortgage principal reduction and interest buy down in the form of a second mortgage loan

Qualified areas: the Denver Metro area

Minimum required credit score: varies based on the first underlying loan terms

Minimum required down payment: $1,000

More details: borrowers must complete a first-time homebuyer course, conduct a property inspection and purchase a home with a purchase price not exceeding 95% of the median local purchase price


Colorado Housing Assistance Corporation (CHAC) First-Time Homebuyer Loan

Who it’s for: first-time buyers

Terms: buyers are eligible for low-interest, flexible loan terms that provide a second mortgage for down payment and closing cost assistance throughout Colorado

Qualified areas: statewide

Minimum required credit score: varies

Minimum required down payment: $1,000 or $750, if in a disability program

More details: CHAC assistance must be submitted by borrower’s first lender after they have completed a first-time homebuyer course. If the first mortgage is paid off, the CHAC loan will be due in full.


VA Home Loan

Who it’s for: first time and nonfirst-time homebuyers that are active duty military members or veterans

Terms: provides 100% financing, eliminating the need for a down payment

Qualified areas: nationwide

Minimum required credit score: 600, but most lenders require a 620

Minimum required down payment: $0

More details: all eligible veterans and active duty military members can use this loan, regardless of whether they have previously purchased a home or used this loan benefit. [Learn more about the VA Home Loan here]


U.S. Department of Agriculture (USDA) Rural Development Loan Guarantee

Who it’s for: first-time and nonfirst-time homebuyers purchasing in a designated rural area

Terms: provides 100% financing, eliminating the need for a down payment

Qualified areas: nationwide, in designated rural areas

Minimum required credit score: 620

Minimum required down payment: $0

More details: to be eligible, borrowers must not have been previously suspended from participation in federal programs and should work with a lender to ensure that their desired address is in the designated area. 


After looking at these options for Colorado first-time homebuyers, you can see that homeownership may be much more within reach than you originally thought. As we mentioned above, don’t disqualify yourself from a program that you are interested in just because you aren’t sure you meet the requirements. If you have specific questions or want more details, you can always pick up the phone for a quick five-minute call to learn more.

If you are buying your first home or making your next home purchase, it’s likely that there are more options available to you than you may know about. However, not all national banks and online lenders offer all of these programs. So, if you have been speaking to a financial organization and they haven’t mentioned these incredible financing options it is likely they do not offer them. If that is the case, try speaking with a local Realtor who can provide you with local lender recommendations that do offer these down payment grants and mortgage assistance programs. Your Realtor can be a valuable resource, not just for buying a home in the Colorado Springs and Denver metro area, but to also introduce you to the right lender. 

About the Author
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Nicole Lee

Nicole is the owner of Ashford Realty Group, where she is one of the lead brokers. With over ten years of experience in the field, she has expertise in both sales and property management in the Colorado Springs area.