Colorado Down Payment Assistance Programs

A down payment assistance program helps make homeownership affordable for low—and moderate-income borrowers by providing financial support to cover part or all of the initial costs, such as the down payment and sometimes closing costs. This ensures that everyone can afford the dream of homeownership through reduced initial costs.

Examples of such programs in Colorado include those offered by the Colorado Housing and Finance Authority (CHFA) and various local city and county initiatives. By lowering the initial financial burden, these programs make it easier for more people to achieve home ownership.

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Benefits of Down Payment Assistance Programs in Colorado

Financial assistance for low and moderate-income families has numerous advantages, which include:

Competitive Rates

These programs often provide low-interest loans on your first mortgage, making homeownership affordable.

Lower Monthly Payments

A higher down payment can save you over time through a reduced principal.

Forgivable Loans

Colorado residents can access a forgivable second mortgage that only needs to be paid off if they move, sell, or refinance

Tax Benefits

Down payment programs are not included in your federal income tax, and you can also apply for a first-time homebuyer credit.

Why Apply for a Down Payment Assistance Program in Colorado with F5 Mortgage?

Our team of skilled mortgage brokers wants to ensure that anyone can enter the Colorado housing market by helping them find solutions to their funding needs. Benefits of working with us to find down payment assistance programs include:

Competitive Rates

We find the best mortgage options, ensuring you get the lowest rates, making homeownership more accessible and affordable.

Fast Turnarounds

We’ve streamlined the application process, making it more efficient, and can often close on loans in as little as three weeks.

Expert Advice

You’ll receive timely and pertinent advice about every step of the home-buying journey and finding the right payment assistance program.

Skilled Mortgage Brokers

Experts in down payment assistance for Colorado homebuyers with access to diverse mortgage options.

Personalized Assistance

Our team will guide you through the entire process, from the loan application to closing, ensuring a smooth and efficient experience.

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Down Payment Assistance Programs in Colorado

First-time buyers can access both statewide and local programs to help them afford the upfront costs of a home purchase.

CHFA Down Payment Assistance Grant

The Colorado Housing and Finance Authority offers a down payment assistance grant equal to $25,000 or 3% of the home’s purchase price, whichever is lesser. You must use the 30-year fixed-rate loan offered through the CHFA program and meet the program requirements, which include a minimum credit score of 620 and meeting the income thresholds.

Down Payment Assistance Programs in Colorado

CHFA Second Mortgage

For those using a CHFA loan, you may be eligible for the lesser of $25,000 or 4% of the first mortgage amount. This 0% interest loan is deferred until you sell, pay off, or refinance the home. You must also complete a CHFA-approved homebuyer course. 

CHFA FirstGeneration Program

If you’re a first-generation homeowner purchasing your first home, you may qualify for up to $25,000 in down payment assistance in the form of a deferred second mortgage that is only repaid when you sell, pay off, or refinance the property.

CHAC Down Payment Loan

The Colorado Housing Assistance Corporation offers a second mortgage loan for those who provide a deposit of at least 1% on their home. These low-interest loans require repayment and have purchase price limits; they can only be used for a primary residence.

NeighborhoodLIFT

NeighborhoodLIFT offers up to $15,000 in funds for a down payment and closing costs to eligible home buyers. This must be a principal residence, though the program isn’t limited to first-time homebuyers. They also offer related services like homebuyer education.

Colorado Down Payment Assistance Programs by Location

In addition to these options, homebuyers who live in the target area can utilize other programs for down payment and closing cost assistance.

Denver

Front Range and Denver residents can use the MetroDPA program, which offers forgivable loans for down payments and closing costs to those who meet the eligibility requirements. If you stay in the home for at least three years, you don’t have to repay the loan. 

NEWSED Community Development Corporation also offers second loan programs of up to $10,000 for eligible buyers; this program allows for incomes of up to 120% of AMI. 

Colorado Down Payment Assistance Programs by Location

Commerce City

Metro Mortgage Assistance provides a 30-year fixed-rate mortgage and up to 4% of the mortgage amount for low and moderate-income borrowers with a credit score of at least 640. You must put at least 0.5% down in closing costs to qualify.

Pueblo

A first-time homebuyer in Pueblo can access a deferred loan for a HUD-approved property using a loan from any private lender or financial institution. If the borrower meets all qualifications for five years, the loan is forgiven. Amounts up to $5,000 are available.

Boulder

The Solution Grant offers Boulder homebuyers making 81% or less of the AMI grants to help purchase affordable housing. You must take an educational course and put at least $2,000 or 1% (whichever is greater) down on the property.

Those outside of city limits can use the Boulder County Down Payment Assistance Program, which provides up to 8.5% of the purchase price as a second loan.

Who Qualifies for Down Payment Assistance in Colorado?

While each program is slightly different, most have similar restrictions on income and homebuyer status. In general, borrowers must make no more than 80% of the AMI and be purchasing their first property in at least the last three years. You usually must have a debt-to-income ratio of less than 50%. 

City or countywide programs can only be used in the given area. In many cases, mobile homes are excluded from assistance programs. 

There are some specialized programs for first responders, medical professionals, law enforcement officers, and veterans. One such program is the First Responder Loan, which provides $500 on closing costs and low interest rates.  

How to Apply for Down Payment Assistance in Colorado?

Before starting, you should work to improve your credit score, as this will help you access the best rates. Ensure you meet the specific criteria for the program you’re applying for, organize your documents early, provide accurate information on your application, and stay in touch with your lender to check the status of your application. Follow this step-by-step process:

Improve Your Credit Score

Order a copy of your credit report, pay down existing debts, use credit wisely, and reduce your debt-to-income ratio.

Contact an Approved Mortgage Lender

Select the down payment assistance program that fits your needs and choose the type of loan you’d like to receive.

Complete an Education Course

Many programs require applicants to complete a homebuyer education course.

Prepare Required Documents

  • Identification (Driver’s License, Social Security Card)
  • Proof of Income (Pay Stubs, Tax Returns)
  • Bank Statements
  • Employment Verification
  • Credit Report
  • Purchase Agreement (if available)

Fill Out Your Mortgage Application

Provide all required information accurately and submit the application to your lender.

Wait for Approval

Your lender will review your application and documents. You may need to provide additional information or clarification.

Close on the Home

Once approved, complete the closing process to finalize your home purchase.

Prepare For Your Mortgage Application

  • Improve Your Credit Score

Order a copy of your credit report to check for errors or discrepancies. Pay down existing debts to reduce your debt-to-income ratio. Use credit wisely by avoiding large purchases and making timely payments.

  • Organize Financial Documents

Gather identification documents like your Driver’s License and Social Security Card. Typically, you will need two years of tax returns, at least two months of bank statements, pay stubs, a list of your debts, employment history details, and identification.

  • Complete a Homebuyer Education Course

Many down payment programs require a homebuyer course. These courses provide valuable information and improve your chances of approval.

  • Get Pre-Approved

Apply for pre-approval to understand how much you can borrow. This also shows sellers that you are a serious and qualified buyer.

  • Seek Professional Guidance

Work with a mortgage broker or real estate agent like F5 Mortgage agents, who are experienced in down payment programs. They can provide personalized advice and help you navigate the application process.

  • Appraisal

The property you want to buy must be appraised to ensure that it meets the lender’s specifications. Then, it will go to underwriting and approval. 

FAQs About Down Payment Assistance in Colorado

What is the income limit for down payment assistance in Colorado?

For most programs, the income limit is 80% or 81% of the area median income as determined by HUD. You can look up these thresholds on the Housing and Urban Development website. 

Can you buy a house in Colorado with no money down?

Most of the loan programs require at least some cash down. However, you may be able to secure a VA or USDA loan, which have no down payment requirements.

How much is a down payment for a house in Colorado?

The typical down payment in the Centennial State is 17.2%, or $66,062.

Is there down payment assistance available for first-time homebuyers in Colorado?

First-time homebuyers can access a variety of options, many of which are forgivable, that can provide a significant lump sum toward their down payment. These include options from CHAC, CHFA, and local governments.

How much down payment assistance can I get in Colorado?

The maximum amount available is $25,000 from the CFHA, which is a deferred second loan.

Do I have to repay down payment assistance in Colorado?

While some grants are available, most assistance options must be repaid if you sell or refinance the property during the loan term. The CHAC loan requires a monthly payment.

Can you get down payment assistance with a low credit score in Colorado?

Most of the options available require a credit score of at least 640 to participate. However, our team will search for assistance options that match your borrowing profile, ensuring you have the funds you need to purchase affordable housing. 

Are there specific down payment assistance programs for veterans in Colorado?

The First Responder Loan provides a $500 discount in closing costs for veterans, and CHFA products can be used in conjunction with VA loans to provide greater affordability. Additionally, the Military Housing Assistance Fund, a nationwide program, can help veterans cover the upfront costs of homeownership. 

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Down Payment Assistance Programs in Other States We Serve

South Carolina

SC Housing provides a 15-year, forgivable loan with a 0% interest rate and no monthly payments, significantly reducing the upfront expenses of homeownership. 

Florida

The Florida Assist Second Mortgage Program provides forgivable loans with 0% interest to eligible first-time buyers, helping everyone afford their dreams.

Georgia

With the Georgia Dream Loan Program, those who have not owned a home in the last three years can access up to 5% or $10,000 in funding for their home.

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Texas

Low-income borrowers will appreciate the Home Sweet Texas program, which offers a second, forgivable mortgage up to 5% of the loan amount with a 0% interest rate and no payments.

Michigan

The affordable MI Home Loan Program offers $7,500 for eligible buyers, as well as affordable interest rates on fixed-rate loans.

California

Through programs provided by the California Housing Finance Agency (CalHFA), borrowers can access the MyHome Assistance Program, with funds up to 3.5% of the home price.

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