Are you embarking on the exciting journey of purchasing your first home in Colorado? If you're seeking financial assistance for your down payment and closing costs, the Colorado Housing and Finance Authority (CHFA) offers a solution tailored to your needs. In this comprehensive guide, we will delve into the details of CHFA's Down Payment Assistance (DPA) Program, providing valuable insights into its functioning, eligibility criteria, and the benefits it brings to first-time homebuyers. Let's explore this invaluable resource together!
Understanding CHFA's Down Payment Assistance Program
CHFA's Down Payment Assistance Program aims to support first-time homebuyers who are utilizing one of CHFA's first mortgage loan programs to finance their home purchase. Remarkably, even if you are contributing your own funds towards the down payment, you may still be eligible for additional assistance through CHFA's offerings.
Exploring the Types of Down Payment Assistance
CHFA provides two primary types of down payment assistance to eligible homebuyers:
- DPA Grant*: This grant is a remarkable opportunity as it can provide financial assistance equal to the lesser of $25,000 or 3% of the total loan amount.** The most attractive aspect of this grant is that no repayment is required, making it a substantial boost towards achieving your homeownership dreams.
- DPA Second Mortgage Loan*: With this option, you can obtain a loan equal to the lesser of $25,000 or 4% of the total loan amount.** Repayment of the loan balance is deferred until specific events occur, such as the payoff of your first mortgage, the sale or refinance of the home, or if the home is no longer your primary residence.
Navigating the Eligibility Criteria
To take advantage of CHFA's Down Payment Assistance Program, it's essential to meet certain requirements. Here are the general eligibility criteria:
- Credit Score: All borrowers must have a minimum mid-credit score of 620 or higher. A good credit score demonstrates your financial responsibility and enhances your eligibility.
- Income Limits: Your total borrower income must not exceed CHFA's income limits. These limits vary depending on the size of your family and the county in which you intend to purchase a home.
- Homebuyer Education: CHFA places significant emphasis on homebuyer education. It is mandatory to attend a CHFA-approved homebuyer education class, either in person or online, before loan closing. These classes provide vital knowledge to navigate the homebuying process confidently.
- Financial Contribution: You must make a minimum financial contribution of at least $1,000 towards the purchase of your home. This requirement showcases your commitment to homeownership and your ability to contribute to the overall investment.
It's important to note that, in addition to meeting CHFA's program requirements, borrowers must also qualify according to the underwriting guidelines established by one of CHFA's Participating Lenders.
Accessing CHFA's Down Payment Assistance Program
To access CHFA's Down Payment Assistance Program, you must connect with a CHFA Participating Lender. CHFA does not directly lend money to consumers; they collaborate with approved lenders who facilitate the qualification process and offer mortgage loans.
Security First Financial is a proud CHFA Participating Lender and is dedicated to guiding first-time homebuyers through the complexities of the CHFA program. Our goal is to help you secure the financing necessary to fulfill your homeownership aspirations.
CHFA's Down Payment Assistance Program is an invaluable resource for first-time homebuyers in Colorado, designed to make homeownership more accessible and affordable. By providing grants and second mortgage loans, CHFA empowers you to overcome financial barriers on your path to homeownership. Remember to consult a CHFA Participating Lender like Security First Financial, who understands the importance of responsible homeownership and is committed to assisting you throughout your homebuying journey.
Contact us today to explore CHFA's Down Payment Assistance Program and take the first step towards achieving your dream of owning a home.
* Higher interest rates apply. First lien interest rates are higher when using a DPA second.
**For a 30-year, fixed-rate loan