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CHFA Loan Programs & Grants for Coloradans

Nathan Jennison
April 14, 2024

The Colorado Housing and Finance Authority (CHFA) provides a path to homeownership through mortgage loans and down payment assistance programs. CHFA mortgage loans offer competitive fixed-rate financing, ensuring predictable monthly payments over a 30-year term. Their Downpayment Assistance Program (DAP) offers substantial support to first-time buyers, with assistance in covering down payment and closing costs. Learn more about CHFA Loan and grants in this guide.

Key Takeaways

  1. Combine CHFA Loans with Other Assistance for Maximum Benefit: An advantageous aspect of CHFA loans is the possibility of pairing them with other available grants or loan down payment assistance programs. This can significantly amplify the financial benefits, reducing the initial costs of purchasing a home and making homeownership more accessible..
  2. Interest Rate Discounts in Targeted Areas: An additional perk of CHFA programs is the potential for interest rate discounts when purchasing in targeted areas. This can make the dream of homeownership even more attainable by lowering the overall cost of borrowing.
  3. Expertise in Closing CHFA Loans: As a CHFA participating lender, The Mortgage Architects have a wealth of experience in navigating the complexities of CHFA loans and down payment assistance programs. We close these types of loans routinely, ensuring a smooth and efficient process for our clients.

Colorado Housing

CHFA Loans: A Gateway to Your Colorado Home

CHFA loans offer a lifeline to prospective homeowners, providing borrowers with a blend of financial assistance and educational resources. Whether you’re a first-time buyer or looking to refinance, CHFA’s loan programs are designed to facilitate a smoother, more accessible path to owning a home in Colorado.

photograph of a colorado neighborhood with rocky mountains in background in early fall with trees looking green and gold.

CHFA Programs at a Glance

CHFA offers various loan programs, including FHA, VA, and USDA-RD loans, with options for non-first-time homebuyers as well. Conventional mortgages do not typically come with down payment assistance programs like those offered by CHFA.

The Down Payment Assistance Grant provides down payment for up to 3% of the first mortgage loan amount without repayment, while the Down Payment Assistance Second Mortgage Loan offers down payment assistance grants up to 4% of the first mortgage loan amount with deferred repayment conditions.

  • Down Payment Assistance Grant
  • Down Payment Assistance Second Mortgage Loan
  • Minimum Financial Investment (MFI) is $1,000 (what you have to put toward the downpayment in addition to any assistance received)
table showing chfa grant versus the chfa second mortgage loan down payment assistance options.

Partner with a Trusted CHFA Participating Lender

The Mortgage Architects loan officer with happy clients at closing appointment hodling up house cardboard cutout after signing contract for new home.

By engaging with a CHFA participating lender like The Mortgage Architects, you’re not just seeking a loan; you’re stepping into a partnership that values transparency, education, and your financial well-being, ensuring that your journey to homeownership is as rewarding as the destination itself. Our expertise in CHFA’s varied loan programs ensures a streamlined and hassle-free home-buying experience, empowering you to find a home that aligns with your financial goals.

Qualifying for CHFA’s Benefits

To qualify to tap into CHFA’s benefits, applicants must meet specific criteria, such as being a first-time buyer or adhering to income and property price limits. These prerequisites are designed to direct resources to those most in need. Even non-first-time buyers can access CHFA loans if they purchase in designated areas and meet certain conditions.

  • Eligible as a first-time buyer or if you haven’t owned a home in the last three years.
  • Minimum 620 credit score required for CHFA eligibility.
  • Adhere to CHFA’s home sales price limits.
  • Must meet CHFA’s household income limits.
  • Attend an approved homebuyer education class

If you’re a first time homebuyers purchasing in a Targeted Area, there are specific income limits and sales price limits set by CHFA that you’ll need to adhere to. However, the good news is that if you’re a non-first-time homebuyer, you can still qualify for a CHFA loan if you purchase in a Targeted Area and do not own any other property at the time of first mortgage loan closing.

CHFA’s portfolio caters to a broad spectrum of Coloradans, including:

  • Teachers and police officers
  • Military personnel veterans
  • Coloradans with disabilities

This inclusivity ensures that a variety of housing needs are addressed, whether it’s buying a new home or refinancing an existing property.

Preparing for Your CHFA Loan Application

Wood blocks arranged as stairs with red flag at top final stair to signify steps to home loan process.

The CHFA loan application process is comprehensive, ensuring that applicants are well-informed and ready for homeownership. From selecting the right home to finalizing the purchase, every step is crucial, and detailed preparation can significantly enhance the success rate. The application process includes the following steps:

  1. Applying for the mortgage
  2. Finding the right home
  3. Making an offer
  4. Conducting a home inspection and appraisal
  5. Closing on the home

Maximizing CHFA Loan Benefits

Leveraging CHFA loan benefits involves smart financial strategies and a deep understanding of the available programs. You can apply for the CHFA loan down payment assistance to reduce upfront purchase costs and potentially avoid mortgage insurance. Additionally, you can combine CHFA loans with other available grants or loan down payment assistance programs for maximum financial benefit.

CHFA Loan Options

Renovation Loans for First-Time Buyers

CHFA is committed to supporting first-time homebuyers with programs like the FHA 203(k) Renovation Loan, which simplifies the process of buying and renovating a home.

💡 Additionally, buying in targeted areas can lead to interest rate discounts, making homeownership even more attainable.

CHFA Refinancing Options

While CHFA is a beacon for first-time buyers, it also offers refinancing solutions with specific eligibility criteria. These options can lead to reduced monthly payments and long-term savings, provided the homeowner meets the necessary, credit score, and property requirements.

CHFA Pros and Cons

While CHFA loans offer benefits to borrowers like below-market interest rates and down payment assistance, they also come with limitations such as specific income eligibility criteria, potential geographical restrictions, additional documentation needs, and longer closing times compared to conventional mortgages. Prospective borrowers should weigh these factors carefully when considering a CHFA loan for their home purchase.

Pros of CHFA Loans

Below Market Interest Rates: CHFA loans offer below-market interest rates, which are less impacted by credit scores compared to other types of loans.

Down Payment Assistance: CHFA provides a Down Payment Assistance Program (DAP) that has funds that can cover down payment costs for qualifying borrowers, along with the option to use gift funds.

Variety of Loan Programs: CHFA offers a range of loan programs tailored for first-time homebuyers in Connecticut, including 30-year fixed-rate mortgages.

Flexible Eligibility: While interest rates are low and credit score requirements are less stringent, CHFA loans are accessible to first-time homebuyers or those who have not owned a home in the past three years, with limits on sales price and household income.

Geographical Restrictions: Some down payment assistance grants and programs may be limited by geographical areas, restricting access based on city or county programs. However, the CHFA loan itself does not impose such restrictions, offering more flexibility in this regard.

Cons of CHFA Loans

Limited Eligibility: Not everyone qualifies for a CHFA loan, as applicants must be first-time homebuyers or have not owned a home in the past three years, meeting specific criteria on sales price and household income.

Additional Documentation Requirements: Due to income limits, asset restrictions, and first-time homebuyer requirements, there may be additional documentation needed for CHFA loans compared to conventional mortgages.

Longer Closing Times: CHFA loans may take longer to close due to additional compliance reviews and documentation requirements, potentially extending the time needed for loan approval and processing.

The Importance of Closing Cost Awareness

Understanding and planning for closing costs are essential steps in the CHFA loan process. These closing costs, which can vary, are an integral part of the home buying equation, and CHFA lenders provide crucial guidance on closing costs to ensure buyers are well-prepared.

Get Started

Ready to make your dream of homeownership a reality? Don’t wait! Reach out to The Mortgage Architects today and start your application process for a CHFA loan. Our expert team is dedicated to guiding you through every step of securing a mortgage that suits your needs, providing not just financial solutions but a foundation for your future.

🏡 Take the first step towards your Colorado home. Contact us now and discover how simple and rewarding securing a CHFA loan can be with the right support. Whether you’re a first-time homebuyer or looking to refinance, we’re here to make your journey to homeownership as smooth and successful as possible.

Click here to get started or call us at (720) 610-0113 to schedule your consultation. Your new home awaits— let The Mortgage Architects help you build the path to it!

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