Craving the vibrant buzz of Denver’s urban core or yearning for the serene embrace of Colorado’s secluded mountain enclaves? Whichever vibe you chase, the Centennial State beckons outdoor lovers in droves. Yet, snagging a home here can feel like scaling a rocky cliff, especially for novices in the property game. Thankfully, the Colorado Housing and Finance Authority (CHFA) rolls out a suite of initiatives designed to turn homeownership dreams into wallet-friendly realities.
Colorado’s Housing Landscape at a Glance
| Median Market Time | 67 days | Redfin, Jan 2025 |
| Median Down Payment | $104,000 | ATTOM, Dec 2024 |
| Most Affordable Counties | Baca, Bent, Crowley, Kiowa, Otero | ATTOM, Dec 2024 |
CHFA’s FirstStep and FirstStep Plus: Launchpads for New Buyers
Designed for newcomers to the housing market, veterans, or those purchasing in designated zones, FirstStep programs offer 30-year fixed-rate FHA loans with optional down payment help. If you’re breaking family ground as a first-generation homeowner — the trailblazer in your lineage — CHFA’s FirstGeneration and FirstGeneration Plus mirror these offerings closely.
Eligibility Criteria
- Minimum credit score of 620; applicants lacking a formal credit score still considered
- Must be a first-time buyer or qualified veteran, except when purchasing within targeted neighborhoods
- Debt-to-income ratio capped at 50% for mid-FICO scores between 620 and 659, 55% for scores 660 and above
- Completion of a homebuyer education course is mandatory
- Adherence to income and purchase price ceilings
- Personal contribution minimum of $1,000 towards the purchase
Advantages and Drawbacks
- Pros: Considers buyers without credit histories; CHFA’s most competitively priced mortgage; accessible to repeat buyers within target areas
- Cons: FHA loans only; obligatory $1,000 individual cash input; co-signers not allowed
SmartStep and SmartStep Plus: Flexibility Meets Assistance
Offering a playground for USDA, VA, and other government-backed loans, SmartStep programs sweeten the deal with down payment grants instead of second mortgages, easing repayment burdens.
Eligibility Essentials
- Credit score floor at 620; no-score applicants may still be considered
- Debt-to-income limits remain consistent with FirstStep parameters
- Mandatory homebuyer education class completion
- Income limit set at $162,960
- Personal contribution requirement: minimum $1,000
Strengths and Weaknesses
- Pros: No caps on purchase price; grant assistance that doesn’t demand repayment; open to novices and seasoned buyers alike
- Cons: No co-signers allowed; personal fund contribution equals 1% of purchase price
CHFA Preferred and Preferred Plus: Conventional Loans with Perks
This pair resembles FirstStep but ventures into conventional loan territory, letting homeowners eventually ditch private mortgage insurance once they hit 20% equity.
Must-Haves
- Credit score minimum 620, with flexibility for no-credit-score applicants
- Adherence to established debt-to-income thresholds
- Completion of educational homebuyer program
- Income and purchase price restrictions apply
- At least $1,000 personal cash contribution
Pros and Cons Overview
- Pros: Available for various property types, including accessory dwelling units (ADUs); open to first-time and repeat buyers; no price limits
- Cons: No co-signers; $1,000 own funds required
SectionEight and SectionEight Plus: Supporting Section 8 Recipients
For first-time buyers or vets benefiting from Section 8 assistance, CHFA provides 30-year fixed-rate FHA or USDA loans tailored to this group.
Requirements
- Credit score floor of 620
- First-time buyer or qualified veteran status
- DTI limits consistent with other CHFA programs
- Completion of homebuyer education
- Income cap of $162,960
Benefits and Drawbacks
- Pros: Lower minimum personal contribution ($750, or $500 via ACH); no price limits; supports multiple property types including ADUs
- Cons: Manual loan underwriting slows processing; FHA 203(k) loans are off the table
Down Payment Help from CHFA
Two flavors exist: zero-percent second mortgages and grants. The second mortgage offers assistance up to $25,000 or 4% of your first mortgage (whichever is less), payable only upon sale, refinance, or payoff. Grants cap at $25,000 or 3% of purchase price and are exclusive to SmartStep or Section 8 borrowers.
Pros and Cons
- Pros: Interest-free second mortgage; grants need no repayment
- Cons: Grants come paired with a higher mortgage interest rate; second mortgages carry slightly elevated rates
The MetroDPA Advantage
Buying within the Front Range’s municipal mosaic? MetroDPA lends a hand with down payments and closing costs through zero-interest, second mortgages based on a percentage of your purchase price.
Key Criteria
- Credit score generally 640+, with some approvals at 620
- Max income threshold: $195,600 annually
- Purchase must be in approved counties like Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, Jefferson, or Larimer
MetroDPA Pros and Cons
- Pros: No scheduled repayments during ownership; compatible with conventional, FHA, USDA, and VA loans; interest-free
- Cons: Loan repayment triggered upon mortgage payoff or property sale
Colorado Housing Assistance Corporation: Supporting Your Closing Costs
Offering loans ranging from $5,000 to $12,000, this nonprofit helps cover down payment and closing expenses statewide.
Eligibility
- Must fit income and purchase price limits
- Attendance at a first-time buyer course is required
- Separate borrower counseling beyond the basic class mandatory
Perks and Pitfalls
- Pros: Option to defer interest for first five years; special deferment and reduced rates for borrowers with disabilities
- Cons: Interest rates vary between 3% and 5%; additional fees such as monthly service, commitment, wiring, and document prep apply
Other Nationwide Programs Worth a Look
While exploring local options, don’t overlook broader first-time buyer programs:
- USDA Loans: Zero down payment but restricted to USDA-eligible rural locations; credit score typically must exceed 640.
- Shop Around: Not all lenders are equal — comparing offers can land you better rates.
- Home Insurance: Calculate and compare premiums carefully to protect your investment.
- Credit Score: Surpassing the minimum score (620 for CHFA programs) can translate into substantial savings.
Discover Additional State-Level Homebuyer Assistance
Each state rolls out its own array of first-time buyer incentives. Dig into what’s offered elsewhere to maximize your homebuying power.