If you are looking for Colorado down payment assistance when buying a home, you need to be aware of the different programs available. Here is the lowdown of the different programs that offer varying financial assistance programs for first time home buyers.
Colorado Housing and Finance Authority (CHFA) is the place to start. They have several programs with down-payment assistance ranging from $5,000 to $10,000 up to 3.5% of the purchase price.
Many counties throughout Colorado have programs. Adams county, for example, offers up to $7,000 for those who are purchasing property in the county for the first time. Arapahoe county makes $10,000 available as payment assistance for mortgage down payment of the second term. The Home Ownership Assistance Program in Aurora, Colorado, offers up to $10000 for those who are buying homes within the Aurora city limits.
Below is a list of Colorado Down Payment Assistance Programs:
No Down Payment Mortgages – mortgages that require no down payment
USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.
Low Down Payment Mortgages – mortgages that require up to 3.5% down payment
FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.
Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.
The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.
Colorado Down Payment Assistance Programs
CHFA Advantage Program This Colorado down payment program has the following requirements. If you have a minimum credit score of 680, you can qualify for a 30 year purchase loan with only 3 percent Colorado down (which can be a gift) and no mortgage insurance. Colorado borrowers will need to meet the income and purchase price requirements.
CHFA HomeAccess Second Mortgage For disabled home buyers who also need Colorado down payment assistance, the CHFA offers the HomeAccess Second Mortgage Program. This is a second loan of up to $25,000.
CHFA HomeOpener Program The HomeOpener program does not have any purchase price limits, and the income limits are set higher than the other programs. A 620 credit score is required and qualifying Colorado borrowers must contribute at $1,000 to the transaction. This Colorado down payment program can be paired with Colorado down payment and closing cost assistance.
CHFA Preferred Program This Colorado down payment program requires a credit score of just 620. Yet, rather than no monthly mortgage insurance, Colorado borrowers can qualify for reduced cost mortgage insurance. This Colorado down payment program has income and purchase price limits, and can be combined with the Colorado down payment and closing cost programs. However, the Preferred program with requires 3 percent Colorado down (must be your own funds) and Colorado borrowers must contribute a minimum of $1,000 towards the loan.
CHFA SmartStep Program SmartStep is a purchase program that features the lowest mortgage rates out of all Colorados programs. Colorado borrowers must meet credit score, purchase and income limits. Colorado borrowers can pair the SmartStep program with one of Colorados Colorado down payment/closing cost assistance programs or an MCC. Colorado borrowers must contribute at least $1,000 towards the transaction.
Down Payment Assistance Grant This Colorado down payment program grants up to 3 percent of the loan amount and doesn’t need to be paid back. The money can be used towards Colorado down payment, closing costs, building out your savings account, or to make improvements to your new home.
The US Department of Housing and Urban Development (HUD) offers the following programs:
The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.
To learn more about the Good Neighbor Next Door Program, click here.
The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.
Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.
To learn more about Section 184, click here.
Colorado Housing Agencies
Colorado housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.