There are many loan programs out there to help make housing more affordable for Colorado home buyers. The most popular program comes from the Colorado Housing and Finance Authority (CHFA). Front Range Heroes‘ mortgage lender is certified by CHFA to offer this down payment assistance program to Front Range Heroes home buyers. You can get down payment assistance AND closing cost assistance at the same time!
How Does CHFA Work?
CHFA offers qualifying home buyers either a grant equal to 3% of the loan amount or a “silent second mortgage” equal to 4% of the loan amount. This is generally enough to cover your down payment, which can be as low as 3%. The assistance can be used for down payment and closing costs, and is compatible with both FHA and conventional 30-year fixed rate loan programs. Home buyers must contribute at least $1,000 of their own funds in the transaction, but the rest can come from gifts, seller credits, and Front Range Heroes rebates. You get reduced PMI, too! As an example, a home with a $300,000 sales price would need a minimum $9,000 down payment (3%) for a conventional mortgage. Your loan amount would be $291,000, and CHFA would offer either $8,730 (3%) or $11,640 (4%) to be used towards your down payment.
What’s the Difference between the Grant and the Silent Second Mortgage?
Home buyers who opt for the 3% grant will never have to pay CHFA back. The interest rate is higher in exchange for the assistance. The silent second mortgage is given at 4% of the loan amount. A payment is never owed on this second mortgage, and the interest rate is 0%, but when the home is sold or if the loan is refinanced in the future, that 4% second mortgage will need to be paid off. Home buyers get a lower interest rate if they choose this option. The interest rates are set by CHFA and are the same regardless of lender. They change daily and are available through your Front Range Heroes loan officer.
Who is Eligible for a CHFA loan?
Home buyers who meet the qualification standards for a conventional or FHA loan are eligible for CHFA assistance, provided they do not earn more than the limits set by CHFA. These limits are set by county and vary. You do not need to be a first time home buyer, though CHFA does require every applicant to attend a home buyer workshop (free!).
Yes, if you partner with Front Range Heroes! You’ll still need your $1,000 contribution, but with our help, you can potentially have the rest of your down payment and closing costs covered! We help nurses and other health care professionals, police officers, fire fighters and EMS, teachers, military veterans, and volunteers. If this is you or someone in your household, we’re happy to help!
Is the CHFA Loan Program Right For Me?
There are a lot of factors involved, and it will depend on your goals. Your Front Range Heroes loan officer will help you determine your eligibility for the program and whether it is a good fit for you.
How Do I Get Started?
Fill out our contact form, or give us a call and we’ll chat. We look forward to helping you!