Whether you’re looking for the downtown energy of Denver or hoping for the peace and tranquility of a remote mountain town, Colorado offers plenty of opportunities to spend more time outside. Many have flocked to The Centennial State throughout the pandemic, too: Colorado came in 11th on U-Haul’s list of states with the biggest growth (as preferred, one-way destinations) in 2022.

Buying a home here isn’t easy, though, especially for first-time homebuyers on a budget. If you’re looking for your first home, the state’s housing finance agency, the Colorado Housing and Finance Authority (CHFA), offers a number of programs that can make the dream of owning a home a more affordable reality.





Colorado first-time homebuyer loan programs

The Colorado Housing and Finance Authority (CHFA) provides access to fixed-rate mortgages and financial help for both your down payment and closing costs. In general, you could be eligible for a CHFA program if you:

  • Have a credit score of at least 620 (there can be exceptions if you do not have a credit score at all)
  • Don’t exceed the 50 percent debt-to-income (DTI) ratio limit with a FICO of 620 to 659 (55 percent DTI limit with a FICO of 660 or higher)
  • Complete a homebuyer education class
  • Meet income requirements (based on the loan program, the size of your household and the location of the home)
  • Can contribute at least $1,000 to the purchase
  • Fulfill your mortgage lender’s loan requirements

CHFA has a number of programs for homebuyers, including:

  • CHFA FirstStep – CHFA’s FirstStep and FirstStep Plus programs provide a 30-year fixed-rate FHA loan to first-time homebuyers, veterans or any buyer purchasing in a targeted area, along with down payment assistance if needed. In addition to meeting CHFA general loan requirements, the home you’re buying and your income must be within the program’s purchase price and income limits, respectively.
  • CHFA HomeAccess – CHFA’s HomeAccess and HomeAccess Plus programs can provide a 30-year fixed-rate FHA or USDA loan to a first-time homebuyer or veteran who is either living with a permanent disability or is the custodial parent of a child living with a permanent disability. Like other CHFA programs, there are income and purchase price limits, but if you’re eligible, you can also obtain up to $25,000 in down payment assistance with your loan.
  • CHFA SectionEight – CHFA’s SectionEight and SectionEight Plus Homeownership programs can provide a 30-year fixed-rate FHA or USDA loan to a first-time homebuyer or veteran who’s also receiving Section 8 assistance from a Section 8 agency. You can combine this program with CHFA down payment assistance, but there’s a borrower income limit: $130,200.
  • CHFA SmartStep – CHFA’s SmartStep and SmartStep Plus programs provide 30-year fixed-rate FHA, VA or USDA loans and CHFA down payment assistance. As with the SectionEight program, the income limit is $148,120.
  • HFA Advantage and Preferred loans – CHFA also offers Fannie Mae HFA Preferred and Freddie Mac HFA Advantage loans for up to 97 percent financing, including an Advantage loan for low-income borrowers (called the Very-Low Income Program, or VLIP). These loans can also be paired with CHFA down payment assistance.

Colorado down payment assistance

CHFA offers two types of down payment assistance: a grant and a second mortgage. With the CHFA down payment assistance grant, you can receive funds for up to 3 percent of your first mortgage (for example, $9,000 on a $300,000 mortgage). The grant doesn’t have to be repaid. It can only be combined with a SectionEight or SmartStep first mortgage, however.

CHFA’s second mortgage provides assistance funds for up to 4 percent of your first mortgage ($12,000 on a $300,000 mortgage). You don’t have to repay this assistance until you pay off or refinance the first mortgage or sell your home. This option can be paired with a FirstStep, HomeAccess, Preferred, SectionEight or SmartStep first mortgage.

Note that you can only use one of these options, not both, in conjunction with your first mortgage.

Other first-time homebuyer loan programs

The CHFA isn’t the only option for first-time homebuyers in Colorado. You can also explore options from the Colorado Housing Assistance Corporation, which offers low-interest loans for low- and moderate-income borrowers to help cover the down payment and closing costs. These loans are second mortgages and typically require monthly payments.

If your annual income is less than $176,700 and you’re buying somewhere on the Front Range, you might be eligible for the metroDPA program, which offers up to 5 percent of the purchase price in the form of a three-year, forgivable second mortgage. You’ll need a credit score of 640 to qualify.

As you shop around for a mortgage, consider also looking into low- or no-down payment loans, like FHA, VA or USDA mortgages, or a Fannie Mae or Freddie Mac 3-percent down conventional loan. Depending on your profession, you might also qualify for the Good Neighbor Next Door program, which has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price. Explore Bankrate’s guide to first-time homebuyer loans and programs to learn more.

Get started

As you compare different loan programs and assistance options, keep an eye on the  latest Colorado mortgage rates. Be sure to compare loan options from a variety of mortgage lenders, and if you see an attractive rate, lock it. If you’re ready to buy your first home and are interested in a Colorado Housing and Finance Authority program, register for an online homebuyer education course. Once you have your certificate of completion, browse different lenders through the agency’s website.