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Colorado First-Time Home Buyer Programs of 2019

July 2, 2018
Finding the Right Mortgage, Mortgages
colorado-first-time-home-buyer-programs
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It’s tough to be a first-time home buyer in Colorado these days. With home prices soaring and houses selling quickly, it may feel like your dream of becoming a homeowner is out of reach.

But as a Colorado first-time home buyer, you may have more options than you think. State and national loan programs can make homeownership accessible and affordable, if you know where to find them.

Learn more about first-time home buyer programs available nationwide and from the Colorado Housing and Finance Agency, or CHFA, and how they can benefit you.

National first-time home buyer programs

These national loan programs, which aren’t restricted to first-time home buyers, make it possible to get a mortgage with low credit scores or a limited down payment.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit

 

» MORE: Tips for first-time home buyers

CHFA first-time home buyer loan programs

Using a network of participating mortgage lenders across the state, CHFA offers purchase and refinance loans, as well as down payment and closing cost assistance.

CHFA defines a first-time home buyer as anyone who hasn’t owned or co-owned a home in the past three years. Veterans or repeat home buyers in Colorado can get CHFA loans and assistance if they meet certain requirements.

CHFA highlights and eligibility requirements

Highlights

  • Options for low-cost or no mortgage insurance.
  • Unique programs for people with disabilities and Section 8 renters.
  • Down payment and closing cost assistance.
  • Tax credits available.

Eligibility

  • 620 minimum credit score; borrowers with no credit score may still qualify.
  • Complete a CHFA home buyer education course.
  • Meet income limits, which vary by location and household size.
  • Contribute a minimum down payment, for most loan types.

CHFA FirstStep loan

State program

Learn more

at CHFA

Best for

No credit score

Down payment assistance

What you need to know

By pairing a 30-year, fixed-rate loan with down payment and closing cost assistance, the FirstStep program makes it easier to buy a home. You must be a first-time home buyer or qualified veteran or purchase in a targeted area to be eligible for the FirstStep program. You’ll need a 620 credit score

 

CHFA SmartStep loan

State program

Learn more

at CHFA

Best for

Low mortgage rates

Tax credits

Down payment assistance

What you need to know

Designed for borrowers with a credit score of 620 or higher, the SmartStep mortgage program offers CHFA’s lowest mortgage interest rates. You can combine SmartStep with a Mortgage Credit Certificate and down payment assistance for added savings. Borrowers must complete a home buyer education

 

CHFA Preferred loan

State program

Learn more

at CHFA

Best for

Low down payment

Low mortgage insurance

Down payment assistance

What you need to know

If you can make a 3% down payment and have a 620 credit score, the CHFA Preferred program provides lower mortgage insurance prices. There’s also an option to pay your entire mortgage insurance bill at closing for lower monthly payments. If you don’t have 3%, but have at least $1,000, you can use a

 

CHFA Advantage loan

State program

Learn more

at CHFA

Best for

Low down payment

Tax credits

What you need to know

If you have a 680 credit score and can afford a 3% down payment, the CHFA Advantage program provides a 30-year, fixed-rate mortgage with no mortgage insurance requirement. When you combine the Advantage program with a Mortgage Credit Certificate, you’ll save even more. But you’ll still need to

 

CHFA HomeOpener loan

State program

Learn more

at CHFA

Best for

Down payment assistance

Closing cost assistance

What you need to know

If you have a credit score of 620 or higher but make too much money to qualify for other CHFA programs, a CHFA HomeOpener mortgage may be the answer. The HomeOpener loan program rewards strong credit with higher income and purchase price limits. You must still complete a home buyer education

 

CHFA HomeAccess loan

State program

Learn more

at CHFA

Best for

Disabilities

Low down payment

Down payment assistance

What you need to know

First-time home buyers who live with a permanent disability face unique financial challenges. The CHFA HomeAccess loan program helps people overcome these challenges with extra assistance designed to lower the upfront costs of homeownership. You must be an adult with permanent disabilities or the

 

CHFA SectionEight Homeownership loan

State program

Learn more

at CHFA

Best for

Low-income borrowers

Down payment assistance

What you need to know

Making the leap from renter to homeowner can be especially challenging if you receive Housing Assistance Payments, but the CHFA SectionEight Homeownership loan makes it possible. You must be a first-time home buyer with a 620 credit score and have used Section 8 rental vouchers for at least one

 

CHFA down payment grant

State program

Learn more

at CHFA

Best for

Down payment assistance

What you need to know

With this program, you can get up to 4% of your CHFA mortgage amount for a down payment grant — repayment isn’t required.

 

CHFA second mortgage loan

State program

Learn more

at CHFA

Best for

Down payment assistance

What you need to know

This program provides up to 5% of your CHFA mortgage amount for a down payment. The second mortgage does need to be repaid, but not until you sell, refinance or completely pay off the first mortgage.

 

CHFA mortgage credit certificate

State program

Learn more

at CHFA

What you need to know

Certain CHFA loan programs can be combined with a mortgage credit certificate program, or CHFA MCC, to lower the ongoing costs of homeownership. If you're a first-time home buyer or qualified veteran with a credit score of 620 or higher, the CHFA MCC may lower your federal tax bill by returning 20%

Your next step

Think you’re a good fit for one of these first-time home buyer programs? Start by finding a participating lender to determine your eligibility and apply.

You may also want to assess your credit, figure out how much house you can afford and enroll in a Colorado first-time home buyer education class. It’s available for free in-person or online for a fee, and taking a class will help you make home buying decisions with confidence, no matter which loan option you choose.

» MORE:  See the best Colorado mortgage lenders

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