Colorado First Time Home Buyer Incentive & Down Payment Assistance [2021]
PRO TIP: For most of these programs, you do not have to be a First Time Home Buyer In Colorado to be eligible. Those that have previously owned but do not currently own can be eligible.
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 is a question you have asked yourself before, you are not alone.
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. Finding the right first time buyer mortgage plan for you can be daunting, but this is one of the first steps to buying a house for the first time or becoming a renewed homeowner.
PRO TIP: In traditional mortgage financing, a “first-time homebuyer” is defined as someone who has not owned a home in the last three or more years.
The Two Most Common First Time Home Buyer Myths
So, the two most common myths around buying a home are that there is a large down payment required and that 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 grants and mortgage assistance programs available for today's first time home buyers 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 (when available), and Colorado first time home buyer grants.
It is essential to know that not every lender has access to these 1st 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 first time home buyer government programs, such as the VA Home Loan, for prior or active duty military and the USDA Home Loan, for rural areas, the two next best first time home buyer programs 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 $250,000 home, you are required down payment would be $7500 (at 3%) - $8750 (at 3.5%), which is a relatively substantial amount of money.
The good news is, alternatively, the majority of the programs listed below offer a $0 - $1000 down payment.
As you can see, getting complete and accurate information on these programs can be difficult because they are not widely advertised.
But, that information and the advantages these programs offer can be the difference between owning and investing in your own or someone else’s.
Find The Loan Program That Can Put You In Your Home
Review the first time home buyer qualifications of these programs below to arm yourself with the information you need to pursue buying and owning your own home.
It is important to note that many of these Down Payment Grants and First Time Homeowners Programs are available to those that have previously owned a 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.
The 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.
[CLICK HERE] for a Free Tool that will provide you a list of every program that could open the door to homeownership.
LOAN PROGRAMS & DOWN PAYMENT ASSISTANCE PROGRAMS TABLE OF CONTENTS
CHFA - COLORADO HOUSING FINANCE AUTHORITY FIRST TIME HOME BUYER LOANS & DOWN PAYMENT ASSISTANCE PROGRAMS
ADDITIONAL PROGRAMS & ASSISTANCE
NATIONAL & FEDERAL LOAN PROGRAMS

CHFA - Colorado Housing And Finance Authority Loan Programs
Who it is for: First time home buyers, previous homeowners, and qualified veterans.
Terms: A 30-year, a fixed-rate mortgage can be paired with a 3% down payment grant or a 4% zero-interest second mortgage (silent second) that can help with down payments, closing costs, and more.
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). Several more specific CHFA programs are tailored to more specific needs. These are all outlined down below.
CHFA Preferred / Preferred Plus Program
Who it is for: This is a first time home loan program for low to middle-income range buyers.
Terms: The first time home buyer loan requirements for this program offer a 30 year fixed loan interest rate, second mortgage for up to 4% of first mortgage loan amount (silent second), mortgage insurance (PMI) coverage up to 18%, potential 4% in loan assistance.
Qualified areas: statewide
Minimum credit score: 620
More details: CHFA income limits for borrowers (regardless of the value of the home; limits vary by county) must take CHFA first time home buyers classes before closing.
CHFA First Step/ First Step Plus Program
Who it is for: First-time homebuyers, qualified veterans, non-first time homebuyers in targeted areas
Qualified areas: statewide
Terms: 30year fixed loan interest rate, second mortgage loan available for first time home buyer assistance in down payment/ closing costs/ principal reductions, up to 4% in loan assistance.
Minimum credit score: 620, though buyers with no credit score are permitted.
More details: income limits, home value, and location limits, and required homebuyer course before closing.
CHFA HomeAccess/ HomeAccess Plus
Who it is for: first time home buyers and qualified veterans
Qualified areas: statewide
Terms: 30year fixed-rate loan, second mortgage loan for up to $25,000 available for assistance with down payment/ closing costs (payments deferred until the first mortgage is paid, 0% interest rate).
Minimum credit score: 620, but buyers without a credit score are permitted.
More details: the borrower must have a permanent disability or be the parent of a child with a permanent disability, an educational course required for homebuyers to complete before closing, income limit varies based on county and home value.
CHFA SectionEight Homeownership
Who it is for: first-time homebuyers and qualified veterans approved under SectionEight housing agencies.
Qualified areas: statewide
Terms: 30year fixed loan interest rate, a non-repayable grant for up to 3% of first mortgage loan amount, available second mortgage for up to 4% of the first loan amount (silent second), funds saved may go towards down payments/ closing costs
Minimum credit score: 620, but buyers without a credit score are allowed.
More details: buyers must be on SectionEight assistance from an approved agency, statewide income limit of $126,200
CHFA SmartStep/ SmartStep Plus
Who it is for: This first time buyer program is for any home buyer in Colorado that meets the requirements.
Qualified areas: statewide
Terms: 30 year fixed loan interest rate, a grant for 3% of first mortgage loan amount, available second loan for up to 4% of first mortgage (silent second), proceeds of the first home owners grant may go towards down payment/ closing costs/ principal reductions.
Minimum credit score: 620, though home buyers with no credit score permitted.
More details: statewide income limit of $126,200 regardless of home value, required homebuyer education course to be completed before closing.
CHFA Preferred Very Low Income Program (VLIP)
Who it is for: This first time home buyer mortgage program is for low-income buyers.
Qualified areas: statewide
Terms: 30 year fixed loan interest rate, PMI coverage up to 18%, second mortgage loan available to help with down payment/ closing costs/ principal reductions, potential 1st time home buyer grant for Down Payment Assistance.
Minimum credit score: 620
More details: Income limits for buyers (varies by county, regardless of home value or household size), homebuyer education course required before closing.
El Paso County Turnkey Bond Program
Who it is for: First-time homebuyers
Terms: A 30-year mortgage loan from participating lenders with a down payment grant of 3% to 4% of the mortgage. No repayment of this grant is 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.
Colorado Housing Assistance Corporation (CHAC) First-Time Homebuyer Loan
Who it is for: This is a first time home buyers loan program.
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, conduct a property inspection, and purchase a home with a purchase price not exceeding 95% of the median local purchase price. If the first mortgage is paid off, then the CHAC loan will be due in full.
NEWSED Down Payment Assistance
Who it is for: First time home buyers
Terms: Applicants can receive up to $8,000 for a down payment, closing costs, principal mortgage 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.
FHA Metro Mortgage Assistance Plus Program
Who it's for: First time home buyers and low to 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.
VA Home Loan
Who it's for: First home buyer program that also includes 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
Who it is for: First time buyers loan that also includes 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 their desired address is in a rural designated area.
Taking Advantage Of A First Time Homebuyer Program
As noted above, it is vital to know that not every mortgage lender has access to these programs, so you will want to confirm that the lender you contact does have access to the first home mortgage programs listed above before getting into details.
Likewise, if you have been speaking to a lender or financial institution, and they haven't already 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 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.
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.