If you are trying to buy a home in Colorado and need some sort of financial assistance such as flexible mortgage loan requirements or very competitive interest rates, affordable payments, and perhaps down payment assistance then there is good news for you. There are quite a few mortgage programs as well as down payment assistance programs available to you if you qualify.
These programs are offered by many of your local municipalities and primarily 3 state agencies: The Colorado Rural Housing Development Corporation, The Colorado Housing And Finance Authority, and The Colorado Housing Assistance Corporation.
What Loan Programs Are Available To First Time Home Buyers In Colorado?
The Colorado Rural Housing Development Corporation has put programs in place to increase home ownership throughout Colorado. In Denver the CRHDC affiliate Colorado Housing Enterprises (CHE) provides low interest rate mortgages to first time home buyers. These loans are at a minimum 1% below the street market rate for home loans. In many cases these special mortgages are 2 -3% below the street market rate. They also offer down payment assistance to families that qualify. To qualify you must earn between 80 – 115 percent of the area median income.
The Colorado Housing And Finance Authority (CHFA)
CHFA has several home buyer assistance programs. Homebuyer education is required for all programs that CHFA offers. Colorado Housing has a program called the First Step Program which is for first time home buyers or for those individuals who have not been an owner in a home in the past three years. Home buyers using this program will be subject to Income limits.
This program has low affordable interest rates and can be coupled with a second mortgage down payment assistance program also offered by CHFA. You must use this program to buy a primary residence and you must have $1,000 of your own money to put into the deal to be eligible. When you sell your home, you may be subject to a recapture tax for which CHFA will reimburse you for based on your contributions to the CHFA Federal Recapture Tax Reimbursement Program. What Is Recapture Tax?
Another home purchase mortgage program offered by Colorado Housing and Finance Authority is the Taxable Home Opener. This program is available for those who are not first time home buyers. Additionally, income limits and purchase price limits for this program are expanded to allow a broader range of qualified home buyers to get their home mortgage from this program. You will need $500 of your own money to qualify for this program among other qualifying factors like your credit and income.
One last program to mention from CHFA is called the CHFA HomeStretch. This is a 40 year mortgage with competitive interest rates to make this loan program an attractive and affordable option for those home buyers who want a lower mortgage payment. You do not have to be a first time home buyer to get this program. There are income limits for this loan, but no purchase price limits and you will not be subject to any recapture taxes or pre payment penalties should you decide to sell or payoff your mortgage. You may use a CHFA down payment second mortgage with this program.
- There are other unique features of the HomeStretch Mortgage Program worth mentioning: Involuntary Unemployment Insurance, this loan can be used to refinance, you can also establish an automatic payment program which draws your payments bi-weekly from your checking or savings account.
Mortgage Loan Programs From The Colorado Housing Assistance Corporation
The Colorado Housing Assistance Corporation offers mortgage assistance loans to first time home buyers and people with disabilities. The CHAC has other homebuyer assistance pgorams including home buying and home ownwership education classes. One mortgage program that the Colorado Housing Assistance Corporation offers is the Mortgage Assistance Loan.
This program offers a second mortgage of up to $10,000 in financial help to first time home buyers. Homebuyers can use this money to help cover closing costs and down payment. You must have your mortgage lender contact the Colorado Housing Assistance Corporation see if you are eligible and qualify for the program.
Down Payment Assistance Programs In Colorado
There are a number of down payment assistance programs available in Colorado. From the CHFA you can use their Second Mortgage Loan program with their First Step and Taxable Home Opener Programs to help with your down payment and closing costs. There are no payments required on this loan, which can help you more easily qualify for a mortgage.
The CHAC has a down payment assistance program called the Mortgage Assistance Loan. Qualified and eligible home buyers can get up to $10,000 in the form of a second mortgage to assist with down payment and closing cost requirements of their first mortgage.
If you live in Arapahoe County, Adams County, Boulder County, Eagle County, El Paso County, Fremont County, Chaffee County, Custer County, Lake County, Huerfano County, Las Animas County, Jefferson County, Weld County, Bent County, Crowley County, Otero County, Cheyenne County, Elbert County, Kit Carson County, Lincoln County, Logan County, Morgan County, Phillips County, Sedgewick County, Yuma County or Washington County you may be eligible for down payment assistance. The specifics of these programs vary so you will need to check with your lender to see what options you have in your area.
These Locally based mortgage and down payement assistance programs offer help in the form of second mortgages. They are often referred to as acquisition assistance loans. They are usually in the form of a second mortgage. In Arapahoe County, for example, you can get up to $10,000 from the Colorado Housing Assistance Corporation. Typically these mortgages have to be paid back.
The program in Arapahoe County allows no payments for the first five years. After that the interest rate on the second mortgage will be 3%. In Boulder County you can borrow up to $15,000 or 8.5% of the purchase price whatever is less.
To get additional information about down payment assistance programs, or to find out more about mortgage programs please complete the information below:
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