Colorado First-Time Homebuyer Programs

Buying your first home is an exciting journey, but it can also be overwhelming, especially when it comes to figuring out financing options. Luckily, Colorado offers a variety of first-time homebuyer programs that can help make the process more affordable. Here's a breakdown of the most common programs and what they offer.

1. CHFA FirstStep and CHFA Preferred Loans

The Colorado Housing and Finance Authority (CHFA) offers two main loan programs for first-time buyers:

• CHFA FirstStep: This is a loan program for buyers with lower credit scores, allowing for down payments as low as 3%. It's an FHA-backed loan, which means it comes with mortgage insurance to protect the lender but is more accessible to those with less-than-perfect credit.

• CHFA Preferred Loan: This loan is ideal if you have a bit higher credit score. It allows for lower down payments and might have reduced mortgage insurance costs.

These programs work well for those who need extra flexibility with credit scores or have limited savings for a down payment.

2. CHFA Down Payment Assistance Grant

Many first-time buyers struggle with coming up with a down payment. The CHFA Down Payment Assistance Grant can cover up to 4% of your first mortgage loan amount, and best of all, it doesn’t need to be repaid. This grant can help you get into your home faster without the worry of saving up for years.

3. CHFA Second Mortgage Loan

If you need even more help with your down payment or closing costs, you can apply for the CHFA Second Mortgage Loan. This program offers up to 5% of your first mortgage amount as a loan that you can use toward your down payment, closing costs, or both. This loan will need to be repaid, but it comes with low interest rates and flexible repayment options.

4. CHFA SmartStep Plus Program

The SmartStep Plus program is a combination of a first mortgage and down payment assistance. You’ll receive a loan with a fixed interest rate, along with a second mortgage that can help with your down payment and closing costs. It’s a great option if you’re looking to bundle everything together into one program.

5. Mortgage Credit Certificate (MCC)

The Mortgage Credit Certificate is a tax benefit that allows you to claim a portion of your mortgage interest as a credit on your federal tax return. This can be a big help when it comes to making your monthly payments more affordable. It’s available for first-time buyers, and you can combine it with other programs to maximize your savings.

Eligibility Requirements

To qualify for these programs, you’ll typically need to:

• Be a first-time homebuyer (or haven’t owned a home in the last three years)
• Meet income limits that vary based on the program and the location
• Complete a homebuyer education course
• Use an approved lender

How a Real Estate Broker Can Help

Navigating these programs can be complicated, but you don’t have to do it alone. A real estate broker at Legacy 100 can connect you with high-quality lenders who specialize in helping first-time buyers access these programs. They’ll guide you through the process, making sure you understand all your options and get the best deal possible.

By working with a knowledgeable broker, you’ll have the support you need to take full advantage of these programs and make your dream of homeownership a reality.

Ready to get started? Contact a Legacy 100 real estate broker today, and let’s find the best path to homeownership together!

Other First-Time Homebuyer Loan Programs

In addition to Colorado's specific programs, there are several other loan options available to first-time homebuyers. These can often be combined with down payment assistance, giving you even more flexibility when buying your home.

Conventional Loans

Conventional loans are offered by private lenders like banks or mortgage companies, not by the government. They often require a bit more in terms of credit score and financial history but can be a good option if you qualify. Fannie Mae and Freddie Mac offer conventional loan programs that allow for down payments as low as 3%, and these can be used alongside down payment assistance programs, giving first-time buyers more options.

FHA Loans

FHA loans are a popular choice for first-time homebuyers because they offer more flexible credit requirements. You can qualify for an FHA loan with a credit score as low as 580 and a down payment as low as 3.5%. These loans are insured by the Federal Housing Administration (FHA), which means lenders are protected in case you can’t make your payments. This insurance makes it easier for lenders to offer favorable terms to buyers who might not qualify for conventional loans.

VA Loans

If you’re an eligible veteran, active-duty service member, or qualifying military spouse, a VA loan might be the best option for you. These loans are backed by the Department of Veterans Affairs and offer some fantastic benefits, including 0% down payments, lower interest rates, and sometimes even no minimum credit score requirements. This program can be a huge help for those who have served our country and want to buy a home.

USDA Loans

USDA loans are a great choice if you’re looking to buy a home in a rural area. These loans, guaranteed by the U.S. Department of Agriculture, require no down payment and don’t have a set minimum credit score. However, they do have some specific requirements: you’ll need to buy a home in a USDA-eligible rural area, and your income must fall within certain limits. This program is ideal for those looking to settle down outside of more populated urban areas.

How a Real Estate Broker Can Help

Understanding all these options can be overwhelming, but you don’t have to figure it out on your own. A real estate broker at Legacy 100 can connect you with knowledgeable lenders who specialize in these programs and help you navigate the homebuying process. They can explain the details, find the best loan for your situation, and help make the entire process as smooth as possible.