Published · The Loan Ranger
CHFA down payment assistance
The Colorado Housing and Finance Authority (CHFA) offers two kinds of assistance. You choose one:
- A grant. It does not have to be repaid. It is the lesser of $25,000 or 3% of your CHFA first mortgage.
- A second mortgage. It is typically up to 4% of the first mortgage, with 0% interest. It comes due when you refinance the CHFA first mortgage or when it reaches maturity.
Either one is paired with a CHFA first mortgage. The money can go toward your down payment, closing costs and prepaid items. It cannot be used to pay off debt or to give you cash back. CHFA also lists a $1,000 minimum contribution from you, from your own funds or a gift.
Pairing it with FHA, VA or USDA
CHFA’s SmartStep programs combine a 30-year fixed rate FHA, VA or USDA loan with either kind of assistance. CHFA lists a minimum credit score of 620 for these programs, and income limits apply. You also complete a homebuyer education class before closing.
Denver metroDPA
The City and County of Denver sponsors Metro Down Payment Assistance, known as metroDPA. The assistance is a percentage of your first mortgage, given as a deferred second mortgage that is interest free and has no scheduled payments. You use a metroDPA-approved lender and a 30-year fixed rate first mortgage.
Income and credit limits are set by the program and they change, so confirm the current ones on the City of Denver’s metroDPA page before you plan around them.
An example of the math
| On a $350,000 CHFA first mortgage | Amount |
|---|---|
| Grant at 3% | $10,500, no repayment |
| Second mortgage at 4% | $14,000, 0% interest, deferred |
Both are under the $25,000 cap. The grant leaves you with no extra loan to repay. The second mortgage gives more money upfront and adds a balance you repay when you refinance the first mortgage or reach maturity.
Illustrative arithmetic only. It is not a quote, and program terms are set by CHFA and the lender.
Grant or second mortgage?
- A grant fits you if you want the lowest balance later, and the amount covers what you are short.
- A second mortgage can fit if you need the larger amount to reach closing, and you plan to stay in the home or refinance on your own timeline.
Ask for both options on the same purchase so you can compare the cash to close and the long-term cost.
How to find out if you qualify
- Call Max. A few questions about income, credit and the price range tell you which programs are in reach.
- Take the homebuyer class. It is required by the programs above, and you can take it while you shop.
- Choose the first mortgage. The assistance goes with it, so compare the full payment, not only the cash you save upfront.
General information, not a loan approval or financial advice. Loan programs and requirements change, and Max confirms what applies to you.
