Colorado CHFA Down Payment Assistance Grant

The Colorado CHFA Down Payment Assistance Grant, offered by the Colorado Housing and Finance Authority (CHFA), is designed to make homeownership more attainable for Colorado residents. By providing financial support for down payments and closing costs, this grant reduces the upfront costs associated with buying a home and helps more individuals and families achieve stable housing.

Benefits

Provides up to 3% of the first mortgage loan amount as a grant, which does not require repayment.
Can be used toward down payment or closing costs, reducing the buyer’s out-of-pocket expenses.
Available in combination with CHFA mortgage programs, enhancing overall affordability for eligible homebuyers.
Helps first-time and repeat homebuyers who meet eligibility criteria.

Eligibility Requirements

Applicants must qualify for a CHFA first mortgage loan to be eligible for the grant.
Income limits apply and vary based on the household size and the location of the property being purchased.
The property must be located in Colorado and used as the buyer’s primary residence.
Participants must meet lender-specific credit and underwriting requirements, with a minimum credit score typically starting at 620.
Completion of a CHFA-approved homebuyer education course is required before closing on the loan.

Additional Information

The CHFA Down Payment Assistance Grant is an essential resource for Colorado homebuyers, providing crucial financial support to reduce the upfront costs of purchasing a home. Administered by the Colorado Housing and Finance Authority, this program aims to promote affordable homeownership and long-term financial stability for individuals and families across the state.

Frequently Asked Questions About Our Program

What is the CHFA Down Payment Assistance Grant?

The CHFA Down Payment Assistance Grant is a program by the Colorado Housing and Finance Authority (CHFA) that provides eligible homebuyers with up to 3% of their first mortgage amount, capped at $25,000, to assist with down payment and/or closing costs. This grant does not require repayment, making homeownership more accessible.

Who is eligible for the CHFA Down Payment Assistance Grant?

Eligibility requires applicants to use one of CHFA's first mortgage loan programs for their home purchase. Additionally, borrowers must meet specific income and purchase price limits, which vary by county and household size.

Is repayment required for the CHFA Down Payment Assistance Grant?

No, the assistance provided through the CHFA Down Payment Assistance Grant is a true grant and does not need to be repaid, even if you sell or refinance your home in the future.

Are there income limits for applicants?

Yes, income limits apply and vary based on county, household size, and the type of loan program selected. It's essential to verify the current income limits for your specific situation.

What types of properties are eligible?

Eligible properties include single-family, one-unit residences, such as detached or attached homes, approved condominiums, and manufactured homes on a permanent foundation. The property must serve as the borrower's primary residence.

Is homebuyer education required?

Yes, all borrowers must complete a CHFA-approved homebuyer education course prior to loan closing. This ensures that buyers are well-informed about the responsibilities and processes involved in homeownership.

What is the minimum borrower contribution required?

Borrowers are required to contribute a minimum of $1,000 toward the purchase of the home. This contribution can come from the borrower's own funds or an acceptable gift.

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Can the CHFA Down Payment Assistance Grant be combined with other assistance programs?

Yes, the grant can be combined with other CHFA programs, such as the CHFA Second Mortgage Loan, to further assist with down payment and closing costs, enhancing affordability for homebuyers.

Are there credit score requirements?

Yes, borrowers are generally required to have a minimum credit score of 620. However, individual lender requirements may vary, and meeting the minimum score does not guarantee loan approval.

Are there purchase price limits?

Yes, the program imposes purchase price limits that vary by county and household size. It's important to consult the current CHFA guidelines to determine the applicable limits for your desired location.

Is there a prepayment penalty?

No, there is no prepayment penalty associated with CHFA's first mortgage loans or the Down Payment Assistance Grant. Borrowers can make additional payments or pay off the loan early without incurring extra charges.

Can I use this grant for a second home or investment property?

No, the CHFA Down Payment Assistance Grant is intended for primary residences only. All borrowers must occupy the property as their primary residence.

What happens if I sell or refinance my home?

Since the Down Payment Assistance Grant does not require repayment, selling or refinancing your home will not trigger any repayment obligations related to the grant.

Are non-occupant co-borrowers allowed?

No, all borrowers must occupy the property as their primary residence. Non-occupant co-borrowers and co-signers are not permitted under this program.

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How do I apply for the CHFA Down Payment Assistance Grant?

To apply, you must work with a CHFA-approved participating lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.

Is there a deadline to apply for the program?

There is no specific deadline to apply for the CHFA Down Payment Assistance Grant. However, program availability is subject to funding, so it's advisable to begin the application process as soon as you are ready to purchase a home.

Are there any fees associated with the grant?

While the grant itself does not have associated fees, standard loan fees, such as origination and processing fees, may apply to the first mortgage. It's advisable to discuss all potential fees with your lender to understand the total cost of the loan.

Is mortgage insurance required?

Depending on the type of first mortgage loan and the loan-to-value ratio, mortgage insurance may be required. Your lender can provide specific details based on your loan scenario.

Can I use the grant for closing costs?

Yes, the CHFA Down Payment Assistance Grant can be used toward both down payment and reasonable closing costs, including prepaids and other related expenses.

What are the debt-to-income (DTI) ratio requirements?

The program has DTI ratio limits, which may vary based on credit score and loan type. Generally, a maximum DTI of 50% is allowed with a mid-FICO score of 620 to 659, and up to 55% with a mid-FICO score of 660 or above.