Colorado First Time Home Buyer Incentive & Down Payment Assistance [2021]

For both the First Time Home Buyer In Colorado & those that have previously owned but do not currently own now.

Would you prefer to own your own home instead of renting one, but think that purchasing a home is financially out of reach? If this applies to you, you are not alone.

A recent study by Freddie Mac finds that two-thirds of those renting today do not know that they can afford to buy and own a home.

Because of that, today’s renter continues to endure, among other things, the certainty of rising rents and the possibility of having to move at the end of every lease term if the property owner does not agree to renew the lease. 

HOWEVER, this guide will show you several programs and incentives available for the Colorado first time home buyer (and even for those that have previously owned a home) that make buying a home not only possible but, in most cases, less expensive than renting.

Simply put, these programs open the door to homeownership for thousands of people and families every year that otherwise would still be renting today.

Insider Tip: A “First-time homebuyer” defined as someone who has not owned a home in the last 3+ years.

The Two Most Common First Time Home Buyer Myths

So, the two most common myths around buying a home are that 1. a large down payment is required and 2. one needs excellent credit before considering purchasing a home.

If this is you, don't worry, this is a common but inaccurate assumption.

Those Myths Dispelled

Below we will show you the numerous down payment assistance grants and mortgage assistance programs available for today's first time homebuyer in Colorado. Most of these programs also accept “fair” credit scores, therefore effectively dispelling those myths. We have included the minimum credit score for each program below.

These programs include first time home buyer closing cost assistance programs, CHFA down payment assistance, first time home buyer Colorado tax credits, and Colorado first time home buyer grants.

It is essential to know that not every lender has access to these first time home buyer programs in Colorado. Because of that, you will want to confirm which of these loan programs listed below the lender you contact can offer.

Your Options Without The Colorado First Time Home Buyer & Down Payment Assistance Programs

Outside of the VA Home Loan, for prior or active duty military, and the USDA Home Loan, for rural areas, the two next best home loan options requiring the least amount of down payment are the Conventional Loan and the FHA Loan.

The Conventional Loan, with an approved loan application, allows a 3% down payment option. On the other hand, the FHA loan has a 3.5% down payment.

Using either the Conventional loan with a 3% required down payment or the FHA loan with a required 3.5% down payment on a $300,000 home, your required down payment would be $9000 at 3% with Conventional and $12,250 at 3.5% with FHA, which is still a substantial amount of money.

The good news! Alternatively, most of the programs listed below only require $0 - $1000 for a down payment.

As you may have already noticed, getting complete and accurate information on these programs can be difficult because they are not widely advertised or known....hence why two-thirds of today's renters still do not know they can buy a home. 

Frankly, this information on the availability and advantages of these programs and a good real estate agent can be the difference between you owning and investing in your own home or continuing to rent and invest in someone else’s.

Find The Loan Program That Can Put You In Your Home

Review the programs and their requirements below to arm yourself with the information you need to pursue buying and owning your own home.

Lastly, to prevent any confusion when using any of the programs below, it is essential to know that you will still have an underlining loan, like Conventional, FHA, and VA when using most of these programs or grants.

The majority of First Time Home Buyer Programs and Down Payment Assistance Colorado Programs do not stand alone as a mortgage loan but attach to one of the primary underlining loans.

So you will still see FHA/Chfa, CONV/ Chfa, etc. on your loan application and documents.

Prefer a quick list of the programs you are eligible for vs. studying all of these programs? We Have Free Tool For That!
[CLICK HERE] for a Free Tool that will provide you a list of every program that could open the door to homeownership.

Colorado Housing And Finance Authority (CHFA) Programs

chfa-first-time-homebuyer-programs

Who it's for: First time home 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

NOTE: Effective April 1, 2019, CHFA will provide a 3% down payment grant or a 4% zero-interest second mortgage (silent second).

Qualified areas: Statewide

Minimum credit score: 620

Minimum down payment: $1,000

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

FHA Metro Mortgage Assistance Plus Program

fha-metro-mortgage-assistance-plus-program

Who it's for: First time home 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 credit score: 640

Minimum down payment: 0.5% of the 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

fha-metro-mortgage-assistance-plus-program

Who it's for: First time home buyers ("first time home buyers" 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 credit score: 640

Minimum 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

fha-metro-mortgage-assistance-plus-program

Who it's for: First time home buyers

Terms: Applicants can receive up to $8,000 for a 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 credit score: Varies based on the first underlying loan terms

Minimum 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

fha-metro-mortgage-assistance-plus-program

Who it's for: First time home buyers

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

Qualified areas: Statewide

Minimum credit score: Varies

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

More details: CHAC assistance must be submitted by the 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.

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.

VA Home Loan

fha-metro-mortgage-assistance-plus-program

Who it's for: First time and non-first time homebuyers that are prior or active duty military members or veterans

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

Qualified areas: Nationwide

Minimum credit score: 580, but most lenders require a 620

Minimum 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

fha-metro-mortgage-assistance-plus-program

Who it's for: First time and non-first time home buyers 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 credit score: 620

Minimum 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.   

Taking Advantage Of A First Time Homebuyer Program

It is essential to know that not every lender has access to these programs, so you will want to confirm that the lender you contact does have access to the programs listed above before getting into details. 

Likewise, if you have been speaking to a lender or financial organization and they haven't already mentioned these incredible financing options, it is likely they do not offer them. You will want to ask to make sure.

If the lender you have been speaking with does not provide these programs and you would like to explore these options, try speaking with a local Realtor ® who can provide you with local lender recommendations that offer these down payment grants and mortgage assistance programs. 

Your Realtor can be a valuable resource, not just for houses for sale in the Colorado Springs and Denver area, but also for introducing you to the right lender with access to these programs. 

I hope this information can help put you in your Dream Home sooner than later, but please feel free to reach out below if you have additional questions. - We do our best to respond the same business day.

Questions About These Programs or How To Get Started?

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.