A Plain-English Guide for Colorado First-Time Home Buyers
Buying a home in Colorado can feel out of reach when you start adding up the down payment, closing costs, inspection, appraisal, moving costs, and monthly payment.
That is where CHFA down payment assistance may help.
CHFA stands for the Colorado Housing and Finance Authority. It is a statewide Colorado housing authority that works through participating lenders to offer home purchase loan programs, grants, and 0% second mortgage loans that can help with down payment and closing costs.
For most Colorado first-time home buyers, CHFA is the program with the best options and terms. It helps reduce the amount of cash needed upfront, but it is not the only down payment assistance option in Colorado.
At Colorado Down Payment Assistance Center, our goal is to help buyers understand their options clearly, compare programs, and move toward homeownership with more confidence.
CHFA may be a good fit but it may not be the best fit. The key is comparing it against other down payment assistance options before you decide. We check every program to see what is the best option for you.
Check Your Colorado Down Payment Assistance Options
What Is CHFA Down Payment Assistance?
CHFA down payment assistance is financial help that may be used with a CHFA first mortgage loan. Depending on the program and your situation, the assistance may come as either:
- A CHFA down payment assistance grant
- A CHFA second mortgage loan
CHFA’s grant option offers up to the lesser of $25,000 or 3% of the first mortgage amount, with no repayment required.
CHFA’s second mortgage option offers up to 4% of the first mortgage loan amount, with repayment deferred until certain events, such as mortgage payoff, sale, refinance, or if the home is no longer owner-occupied.
In plain English:
| CHFA option | How it works | Repayment |
|---|---|---|
| CHFA grant | Gives 3% toward your down payment | No repayment required |
| CHFA second mortgage | Gives 4% toward your down payment | Repaid later when a trigger event happens (i.e. refinance or sell) |
| CHFA first mortgage | The main home loan used with CHFA guidelines - higher interest rate for grant, lower interest rate for 0% second mortgage | Paid monthly like a normal mortgage |
The right option depends on your income, credit score, loan type, home price, county, and long-term plans.
How Much CHFA Assistance Can You Get?
CHFA’s current down payment assistance options are generally structured around:
- Up to 3% of your first mortgage amount as a grant
- Up to 4% of your first mortgage amount as a second mortgage
- A maximum assistance amount of $25,000 in many cases
Here is a simple example.
If your first mortgage is $400,000:
- A 3% grant could be up to $12,000
- A 4% second mortgage could be up to $16,000
That money may help with your down payment, closing costs (depending on the program), or other allowed purchase costs (depending on the final loan structure).
Is CHFA Only for First-Time Home Buyers?
No! CHFA is strongly associated with first-time home buyers in Colorado, but not every CHFA program is limited only to first-time buyers.
Some CHFA programs are built specifically for first-time home buyers, qualified veterans, or buyers purchasing in targeted areas. CHFA’s FirstStep program, for example, is restricted to first-time home buyers, qualified veterans, or non-first-time buyers purchasing in targeted areas. There are other programs for current and past homeowners.
A first-time home buyer usually means someone who has not owned a home in the past three years.
So even if you owned a home before, you can still qualify as a first-time buyer if enough time has passed.
CHFA Down Payment Assistance Requirements
CHFA requirements vary by loan program, but buyers usually need to meet several basic standards.
Common CHFA down payment assistance requirements include:
- A qualifying credit score
- Income within CHFA limits
- Completion of CHFA-approved homebuyer education
- Use of a CHFA participating lender
- A home that meets program rules (i.e. mobile homes usually don’t apply)
- Occupying the home as your primary residence
- Enough income to support the monthly payment
Ideally, you will need a mid-credit score of 620 or higher, income must not exceed CHFA income limits, and you must complete a CHFA-sponsored homebuyer education class before closing.
CHFA income limits are program-specific and can vary by county, household size, and targeted area.
CHFA also requires a minimum financial investment of $1,000 toward the purchase of your home as part of the down payment..
Simple CHFA Eligibility Checklist
You may be a possible CHFA fit if:
- You plan to live in the home as your primary residence
- Your credit score is around 620 or higher
- Your income is within the allowed limit for the program
- You can complete the required homebuyer education course - remotely or in person
- You are working with a participating CHFA lender - we have an in-house lender to make this easier
- You need help with the down payment or closing costs
You may need a different option if:
- Your income is above CHFA limits (metroDPA is a great option)
- Your credit score is not high enough
- You need a program with different location rules
- A local, county, or city program gives you a better option
CHFA Grant vs CHFA Second Mortgage
One of the biggest decisions is whether a grant or a second mortgage makes more sense.
CHFA Grant
The CHFA grant may be attractive because it does not need to be repaid. The trade-off is that the grant is a smaller down payment and has a higher interest rate than the second mortgage option.
This can be a good fit for buyers who want help with upfront costs but do not want another loan attached to the home. If you are planning on refinancing in the next few years, the grant may be a great option for you!
CHFA Second Mortgage
The CHFA second mortgage may provide more assistance, but it is still a loan with a 0% interest rate. Repayment is usually deferred until a trigger event happens, such as selling the home, refinancing, paying off the first mortgage, or no longer using the home as your primary residence.
This can be a good fit for buyers who need more upfront help and are comfortable understanding the repayment terms. This is the most popular option because it creates the lowest down payment.
Which One Is Better?
It really depends on your financial situation and goals.
A grant sounds better because it does not require repayment, but the second mortgage may give more of a down payment upfront. The right answer depends on the full mortgage payment, interest rate, closing costs, expected time in the home, and your long-term plans.
That is why we compare CHFA against other Colorado down payment assistance options to see what the best fit is for you..
Compare CHFA With Other Colorado Assistance Programs
Can CHFA Help With Closing Costs Too?
Yes, CHFA down payment assistance can sometimes be used for allowed home purchase costs, which can include down payment and closing costs, depending on the program.
This matters because the down payment is not the only upfront cost buyers face.
Many first-time home buyers also need to plan for:
- Earnest money - we try to keep this as low as possible
- Home inspection
- Appraisal
- Lender fees
- Title fees
- Prepaid taxes and insurance
- Moving costs
- Basic repairs or furniture after closing
A buyer may technically have enough for the down payment but still struggle with the total cash needed to close.
That is why the down payment assistance and closing costs strategy should be looked at together.
CHFA Loans in Colorado: How the Process Works
CHFA does not work like a walk-in grant office where you simply apply for free money.
In most cases, the process works through a CHFA participating lender.
Here is the usual path:
1. Check your basic eligibility
We help you review your credit score, income, debt, savings, and preferred location.
2. Compare CHFA with other options
CHFA may be a strong fit, but it should be compared against other state, county, city, and lender assistance programs.
3. Choose the right mortgage type
CHFA can be connected with different loan types and programs. We help you decide which structure fits your situation.
4. Complete homebuyer education
CHFA requires a homebuyer education class before closing on a CHFA loan.
5. Get pre-approved
Once your documents are reviewed, we help you find out what price range may be realistic.
6. Shop for homes
We search for homes together that fit your budget, loan program, and location. We also act as your realtor to provide a turnkey solution from renting to owning.
7. Go under contract and close
We finalize the CHFA loan, assistance, underwriting, appraisal, and closing documents.
Can You Use CHFA in Northern Colorado?
Yes. CHFA is a statewide Colorado program offered through participating lenders.
That means buyers in throughout Colorado may be able to use CHFA if they meet the requirements.
We help buyers looking across the Front Range, including Fort Collins, Loveland, Greeley, Windsor, Wellington, Longmont, Thornton, Northglenn, Westminster, Wheatridge, Littleton, Broomfield, Arvada, Brighton, Boulder, Erie, Louisville, Denver, Highlands Ranch, Aurora, and surrounding communities all the way down to Colorado Springs.
County and program rules still matter. A buyer in Larimer County may have different income and home price considerations than a buyer in Weld County, Boulder County, Adams County, or Denver.
This is why working with us matters. A program can look simple online, but the best fit often depends on the county, the lender, the home price, and the buyer’s complete situation. We help you decide on the best program and avoid the pitfalls all along the way.
CHFA Is Not the Only Down Payment Assistance Option in Colorado
CHFA is one of the best-known Colorado down payment assistance options, but it is not the only one.
Colorado also has local and nonprofit housing programs. There are down payment assistance options that can help qualified low- to moderate-income families purchase a home, and some funding is used by local governments and nonprofit partners to make homeownership more attainable.
Depending on where you want to buy, you may also want to compare CHFA against:
- MetroDPA
- County-level down payment assistance
- City-level assistance programs
- First-generation homebuyer programs
- HomeAssist homebuyer programs - those with a disability or caregivers for someone with a disability
- Employer or lender assistance
- FHA, VA, USDA, and conventional low down payment options
- Local nonprofit housing resources
The best option is not always the one with the highest assistance amount.
You also need to look at:
- Monthly payment
- Interest rate
- Repayment rules
- Grant vs loan structure
- Whether the program can be combined with others
- How long you plan to stay in the home
- Whether refinancing later may trigger repayment
- How quickly you want to buy
Is CHFA the Right Fit for You?
CHFA may be a good fit if you:
- Have a stable income
- Are close to being mortgage-ready
- Need help with upfront costs
- Plan to live in the home as your main residence
- Meet the credit and income rules
- Want a structured Colorado homebuyer program
- Are comfortable working through a participating lender
CHFA may not be the best fit if:
- Your income is too high for the program (metroDPA is a great option)
- You qualify for a better local assistance option
- You want to avoid deferred repayment
- You plan to refinance or sell quickly
- Your credit needs more work first
- Another loan type gives you a better monthly payment
Many buyers rule themselves out too early.
Some think they need 20% down. Others assume they make too much, do not make enough, or need perfect credit.
The better first step is simple: check your options.
Not Sure if CHFA Is Right for You?
CHFA is one option, but it is not the only one.
Colorado Down Payment Assistance Center helps Colorado buyers compare down payment assistance programs, understand the home buying process, and figure out what steps to take next.
You may qualify for help with your down payment or closing costs.
Check My Down Payment Assistance Options
Common Questions About CHFA Down Payment Assistance
What does CHFA stand for?
CHFA stands for Colorado Housing and Finance Authority. It is a statewide Colorado housing authority that invests in affordable housing, homeownership, and community development.
Does CHFA give grants?
Yes. CHFA has a down payment assistance grant option. The grant can offer up to the lesser of $25,000 or 3% of the first mortgage amount, with no repayment required.
Does CHFA down payment assistance have to be paid back?
It depends on the type of assistance. The CHFA grant does not require repayment. The CHFA 0% second mortgage is a loan with deferred repayment, meaning it may need to be repaid when certain events happen, such as selling, refinancing, paying off the first mortgage, or no longer living in the home as your primary residence.
What credit score do you need for CHFA in Colorado?
You will need a mid-credit score of 620 or higher for CHFA program loans.
Do you have to be a first-time home buyer for CHFA?
Some CHFA programs are for first-time buyers, qualified veterans, or buyers purchasing in targeted areas. Other CHFA options may not be limited to first-time buyers. The exact answer depends on the CHFA program and your situation.
Can CHFA help with closing costs?
Yes, CHFA assistance may be used for allowed purchase costs, which can include down payment and closing cost help depending on the program structure.
Do I need to take a homebuyer education class?
Yes. CHFA requires buyers to complete a CHFA-sponsored homebuyer education class before closing on a CHFA loan.
Is CHFA available throughout Colorado?
Yes. CHFA is statewide and works through a network of participating lenders across Colorado.
Is CHFA better than MetroDPA?
Not always. CHFA and MetroDPA have different rules, assistance structures, locations, income limits, and repayment terms. The better option depends on where you want to buy, your income, your credit, your loan type, and your long-term plans.
How do I know if I qualify for CHFA?
The easiest first step is to check your credit, income, preferred location, and home-buying timeline with us. CHFA may be a good fit, but we will also help you compare other options before deciding.
Get Help Comparing CHFA and Other Colorado Down Payment Assistance Options
CHFA can be a strong option for Colorado first-time home buyers, but it is only one piece of the picture.
You may also qualify for other state, county, city, or lender-based assistance programs.
Colorado Down Payment Assistance Center helps buyers understand what may be possible, compare available programs, and take the next step toward buying a home in Colorado.