This article covers Colorado DPA mortgage programs for first-time homebuyers.
The Gustan Cho Associates are experts in down payment assistance (DPA) programs, and we are proud to offer Colorado Housing and Finance Authority ( CHFA) down payment assistance home loans. In this blog, we detail the advantages and disadvantages of using DPA. We also explain how to apply for a DPA home loan with Gustan Cho Associates.
See if you qualify for down payment assistance now.
Colorado DPA Mortgage Programs And Eligibility Requirements
What Is Down Payment Assistance?
Down payment assistance, or DPA, is money provided by government agencies, charitable organizations, or even employers to help eligible people purchase homes. The Colorado housing finance authority administers two kinds of DPA. The first is a GRANT of up to 3% of your first mortgage. This grant does not require repayment. You must be a first-time buyer to qualify. A first-time homebuyer has not owned property in the last three years. The other program is the SECOND MORTGAGE of up to 4% of your first mortgage amount. You don’t have to make monthly payments on this loan. It becomes due when you pay off your mortgage, sell the home or refinance. Its interest rate is the same as that of your first mortgage.
Related: Down Payment Requirements for Home Purchases
Qualifying for Colorado Down Payment Assistance
To use Colorado DPA, you must complete a homebuyer education course. This course helps prepare you to succeed as a homeowner. You must also qualify based on CHFA INCOME LIMITS. Some CHFA programs use all household income. So, if your spouse is NOT on the mortgage loan but does have income, that income may push you over the qualifying thresholds. It is important to discuss all household income with your loan officer.
GENERAL REQUIREMENTS for down payment assistance:
- All borrowers must have a credit score of 620 or higher.
- The total income for all borrowers may not exceed CHFA‘s income limits.
- All borrowers must attend a certified homebuyer education class either in person or online before they can close on their loan.
- The borrowers must make a minimum financial contribution of at least $1000 towards their home purchase.
- Loan limits follow county agency limits.
- All co-borrowers must occupy the home.
- For some programs, a borrower may own up to one additional residential property.
- The home must be an owner-occupied single-family detached home, a condo, or a townhome. That means rentals and vacation homes don’t qualify. Multi-unit homes, non-warrantable condos, and co-ops don’t qualify.
In addition, borrowers must meet underwriting guidelines for the specific CHFA program.
Disadvantage of Down Payment Assistance
Have you heard the expression “nothing in life is free?” The same is true with mortgage down payment assistance programs. Many DPA programs require a slightly higher interest rate or higher fees. That’s because they cost money to administer. If you don’t require DPA to buy a home, you may pay less over the life of the loan. It’s good to run the numbers with your loan officer before choosing your loan program.
Applying for Colorado Down Payment Assistance
Are you interested in the Colorado Housing and Finance Authority program? Call Gustan Cho Associates Colorado down payment assistance expert, Mike Gracz. Mike can be reached directly at (800) 900-8569. You may also send an email to gcho@gustancho.com.
Mike can help you determine if you qualify for the down payment assistance program. Next, he’ll send you an online application link to start the process. You’ll upload income and banking documents. And you’ll give your loan officer permission to verify your credit and to accept mortgage documents electronically.
Remember, the Gustan Cho Associates does not impose LENDER OVERLAYS on mortgage products. However, we must follow program guidelines in order to qualify you for the down payment assistance.
Related: Minimum Down Payments for Home Purchases
Other Down Payment Assistance Programs
There are many down payment assistance programs available nationwide. The information in this blog applies to the Colorado Housing and Finance Authority down payment assistance programs available. Loan programs are subject to change.
Questions? Call Mike Gracz at (800) 900-8569. Or email gcho@gustancho.com.
Buying a home is a great opportunity for long-term financial success, especially when mortgage rates are low. We look forward to helping you and your family achieve homeownership one way or another. Please reach out today to start your application.
