CHFA Down Payment Assistance in Colorado: Who Qualifies, How Much You Get, and What It Costs You

The short answer

CHFA is the Colorado Housing and Finance Authority. It does not lend directly: a participating lender writes an FHA, VA, USDA or conventional loan under CHFA rules and funds the assistance at closing on CHFA's behalf. Our lender partner is a participating lender and quotes the CHFA loan next to a plain FHA loan so you see both numbers.

What the assistance does to your cash to close

Take a $450,000 Colorado home, the Front Range median for a three-bedroom house, bought with an FHA loan at 3.5 percent down. The down payment is $15,750 and closing costs, prepaid taxes and insurance run about $9,000. The first mortgage is $434,250, so the 3 percent grant is $13,028 and the 4 percent second is $17,370.

The last bar is the one most buyers on this page end up with: the second mortgage covers the down payment and part of the closing costs, the seller pays the rest of the closing costs through a credit we negotiate into the offer, and your own money is the $1,000 minimum plus the earnest deposit you get back at closing. That path, step by step, is $1,000 cash to close.

Grant or second mortgage: which one?

Which CHFA program fits you

Every program sets the loan cap at $832,750 and has no purchase price limit, requires the class, the 620 score and the $1,000 contribution, and allows manufactured homes on a permanent foundation and homes with an existing accessory dwelling unit. Compare the loan types themselves on FHA vs conventional and FHA and VA home buying.

The rules that stop applications

• No cosigners and no non-occupant co-borrowers. Everyone on the loan lives in the home. A parent helps with a gift, not a signature.
• Debt ratio caps. Total monthly debt, housing included, stays under 50 percent of income with a 620 to 659 score and under 55 percent at 660 and up.
• One CHFA home at a time, and it is the home you live in. You can own one other home at closing.
• The class comes first. No certificate, no closing. Twelve months of validity; you must be under contract before it expires.
• Lender fees are capped at a 1 percent origination fee plus normal third-party costs.

Read the chart as the ceiling for everything you pay each month: car, cards, student loans and the new house payment together. At $80,000 a year with $600 of other payments, $2,733 is left for the full house payment, which carries about a $340,000 FHA loan at 7 percent with taxes, insurance and mortgage insurance included. The exact figure for your file comes from mortgage pre-approval.

How it works, step by step

1. Pre-approval with a participating lender. One to two days with two pay stubs, two years of W-2s and two months of bank statements. The lender reserves the CHFA funds the day you go under contract. Start with our lender partner.
2. Take the class the same week. Online, four to six hours, certificate emailed to you and the lender.
3. Shop any price. There is no purchase price limit; the loan cap is $832,750. The homes that pass the FHA appraisal are on the city pages below.
4. Write the offer with a seller credit. We ask the seller for 3 percent toward closing costs on homes that have sat 30 days or more; the assistance covers the down payment. How the offer is built is on making an offer.
5. Inspect, appraise, close. The lender funds the grant or second at the closing table. The line items are on closing costs; what happens between contract and keys is on after your offer is accepted.

CHFA against the other ways in

• metroDPA (Denver metro cities) runs a similar second that is forgiven over time instead of repaid; the lender compares the two on your file. Both are on every way to buy.
• VA at zero down for eligible veterans beats both when you qualify; pair it with CHFA for the closing costs. Denver VA-eligible homes.
• USDA at zero down on addresses outside the urban boundaries, income under 115 percent of the area median. USDA zero-down homes.
• An assumable 3 percent mortgage beats every new loan when the seller has one and you can cover the gap. Assumable mortgage homes.
• Rent-to-own costs more up front and gives you no title. Rent-to-own in Colorado.

Homes that pass FHA, by city

The FHA appraisal is the gate for most CHFA loans: peeling paint, a failing roof, missing handrails and a bad furnace stop the loan. These pages carry the listings whose remarks and condition pass, updated daily.

• Denver homes that pass FHA · all Denver homes for sale
• Aurora homes that pass FHA · all Aurora homes for sale
• Colorado Springs homes that pass FHA · all Colorado Springs homes for sale
• Thornton homes that pass FHA · all Thornton homes for sale
• Westminster homes that pass FHA · all Westminster homes for sale
• Arvada homes that pass FHA · all Arvada homes for sale
• Littleton homes that pass FHA · all Littleton homes for sale
• Parker homes that pass FHA · all Parker homes for sale
• Castle Rock homes that pass FHA · all Castle Rock homes for sale
• Broomfield homes that pass FHA · all Broomfield homes for sale
• Commerce City homes that pass FHA · all Commerce City homes for sale
• Greeley homes that pass FHA · all Greeley homes for sale
• Loveland homes that pass FHA · all Loveland homes for sale

Under $400,000, where the assistance covers the most: Denver homes $100K to $400K, Colorado Springs homes $100K to $400K, Loveland homes $100K to $400K, Westminster homes under $400K.

Questions people ask about CHFA down payment assistance

What is the CHFA income limit in Colorado?

$178,920 a year for CHFA SmartStep and CHFA Preferred, the same number in every county and for every household size. The limit is the borrowers' qualifying income on the loan, not the whole household's. CHFA FirstStep, the FHA-only program for first-time buyers, uses lower limits that change by county. Run your number on mortgage pre-approval.

Do I have to be a first-time buyer to use CHFA?

No. SmartStep and Preferred are open to repeat buyers; you cannot own more than one other home at closing and the new home has to be the one you live in. FirstStep is the program limited to first-time buyers, veterans, and buyers in CHFA target areas. The buyer paths side by side are on every way to buy.

Can the $1,000 minimum contribution be a gift?

Yes. CHFA requires $1,000 of borrower funds and allows that $1,000 to come from a gift. Earnest money you already paid counts toward it. The full worked example is on $1,000 cash to close.

Does the CHFA grant have to be paid back?

No. The grant, up to 3 percent of the first mortgage with a $25,000 cap, is never repaid. The trade is a higher rate on the first mortgage than a CHFA loan without assistance carries; the lender quotes both and you pick. Rate math is on the mortgage calculator.

What happens to the CHFA second mortgage when I sell or refinance?

You pay it back in full at that moment, with no interest added: the second is a 0 percent loan with no monthly payment that comes due on sale, refinance, or the day the home stops being your primary residence. Selling in year three with $40,000 of equity means the $17,370 second comes out of the proceeds first. Plan the refinance on refinancing a Colorado home.

Which homes qualify for a CHFA loan?

Houses, townhomes, condos, modular and manufactured homes on a permanent foundation, and homes with an existing accessory dwelling unit, as long as the home passes the FHA, VA or USDA appraisal for the loan you chose. There is no purchase price limit; the loan itself caps at $832,750. The homes that pass FHA are on Denver FHA-eligible homes and the other city pages below.

Can a parent cosign a CHFA loan?

No. CHFA does not allow cosigners or non-occupant co-borrowers, and nobody who is not on the loan can be on title. If a parent is helping, the help is a gift toward the $1,000 contribution or closing costs, documented with a gift letter. If a relative needs to be on the loan, use a conventional loan instead; compare on FHA vs conventional.

How long is the CHFA homebuyer class?

Four to six hours online, finished at your own pace, from a CHFA-approved provider. Every borrower on the loan takes it before closing, and the certificate is good for 12 months; you have to be under contract before it expires. Start it the week you get pre-approved.

Can I combine CHFA assistance with a seller-paid rate buydown?

Yes. CHFA allows a permanent rate buydown and lets the assistance itself go toward one, and the seller can pay closing costs and points within FHA, VA or USDA limits. How to ask for it is on the listing buydown strategy and the program on rate buydowns in Colorado.

What credit score does CHFA require?

620 mid score for every scored borrower, and a manual underwrite for buyers with no score at all. A 620 to 659 score caps your total debt at 50 percent of income; 660 and up allows 55 percent. Twenty to forty points in 60 days is on credit care.

How much house can I buy with CHFA?

Whatever the FHA, VA or USDA loan supports at your income and debt, up to a loan of $832,750. At $80,000 a year with $600 of other monthly payments, a 50 percent ratio leaves $2,733 for the full housing payment, which carries about a $340,000 FHA loan at 7 percent once taxes, insurance and mortgage insurance are in. Test your own numbers on Can I afford a home now?.

Does CHFA work with VA and USDA loans?

Yes. SmartStep pairs the grant or second mortgage with FHA, FHA 203(k), VA and USDA loans, so a veteran at zero down uses the assistance for closing costs and a buydown instead. VA details are on FHA and VA home buying; the zero-down addresses are on USDA zero-down homes.

Is rent-to-own cheaper than buying with CHFA?

No. A lease-option on the same $450,000 home takes a $13,500 option fee plus a rent premium and you own nothing until the end; CHFA puts you on title now for $1,000 of your own money. The charts are on rent-to-own in Colorado.

Looking for the cheapest homes? Every Colorado home under $400,000, ranked by city with the HOA and the programs that cut your cash to about $1,000: affordable homes for sale in Colorado.