Down Payment Holding You Back? CHFA Can Help
The biggest barrier to homeownership in Colorado isn't qualifying for a mortgage — it's coming up with the down payment. With the statewide median home price around $540,000, even a 3% down payment means $16,200 in cash at closing. For many first-time buyers, especially those already paying high rent, saving that amount while managing student loans, car payments, and daily expenses feels impossible.
That's exactly the gap the Colorado Housing and Finance Authority (CHFA) is designed to fill. Their down payment assistance programs have helped thousands of Coloradans become homeowners, and the 2026 programs are more accessible than ever.
CHFA Programs at a Glance
CHFA FirstStep and FirstStep Plus
- Loan type: 30-year fixed-rate FHA
- Minimum credit score: 620 (some participating lenders accept 580)
- Down payment: 3.5% (standard FHA requirement)
- FirstStep Plus adds: A second mortgage for down payment and closing cost assistance
- Best for: Buyers with lower credit scores who need maximum assistance
CHFA Preferred and Preferred Plus
- Loan type: 30-year fixed-rate conventional
- Minimum credit score: 620
- Down payment: Minimum $1,000 borrower contribution (can be a gift)
- Preferred Plus adds: Second mortgage up to 4% of first mortgage amount for down payment and closing costs
- Best for: Buyers who prefer conventional financing with lower mortgage insurance costs
CHFA HomeAccess and HomeAccess Plus
- Eligibility: First-time buyers OR qualified veterans/active military with disabilities, or parents of dependents with disabilities
- HomeAccess Plus adds: Up to $25,000 second mortgage for down payment and closing costs
- Best for: Eligible veterans and buyers with disabilities who need substantial assistance
Down Payment Assistance Options
Regardless of which CHFA first mortgage you choose, you can pair it with one of two assistance types:
Option 1: CHFA Down Payment Assistance Grant
- Up to 3% of the first mortgage amount
- No repayment required — it's a true grant
- Can be used for down payment, closing costs, or both
Option 2: CHFA Down Payment Assistance Second Mortgage
- Up to $25,000
- Repayment deferred until you sell, refinance, or pay off the first mortgage
- Higher assistance amount than the grant option
Important: You can choose one option or the other, but not both.
2026 Income and Eligibility Requirements
Income Limits
CHFA's 2026 income limits are more generous than many buyers realize:
- 1–2 person household (non-targeted area): Up to $130,400
- 1–2 person household (targeted area): Up to $156,480
- 3+ person household (non-targeted area): Up to $149,960
- 3+ person household (targeted area): Up to $182,560
A household earning $120,000 per year — well above the state median — still qualifies for CHFA in most areas. This isn't a program limited to low-income buyers.
Other Requirements
- Must not have owned a home in the past 3 years (first-time buyer definition)
- Property must be your primary residence in Colorado
- Must complete an approved homebuyer education course (available online, typically $75–$100)
- Must work with a CHFA-participating lender (Cedar Home Loans is a CHFA-participating lender)
- Purchase price limits apply by county
How CHFA Works in Practice: A Real Scenario
Let's walk through a realistic example for a first-time buyer in the Denver metro area:
- Purchase price: $450,000
- Program: CHFA Preferred Plus (conventional)
- Down payment: 3% = $13,500
- CHFA grant (3%): $13,095 (3% of first mortgage)
- Buyer's out-of-pocket: $1,000 minimum contribution + remaining closing costs
- Estimated total needed at closing: $3,000–$5,000 (versus $13,500+ without assistance)
That's the difference between needing $13,500 and needing $3,000–$5,000. For renters paying $2,000/month who've been struggling to save while covering living expenses, CHFA can accelerate the path to homeownership by years.
Combining CHFA with Other Strategies
Seller Concessions
In Colorado's current buyer-friendly market, many sellers are offering 2–3% toward closing costs. Combined with CHFA assistance, this can reduce your out-of-pocket costs to nearly zero in some cases.
Gift Funds
CHFA programs allow gift funds from family members for your minimum contribution and additional closing costs. This makes it even easier to get into a home with minimal personal savings.
Rate Buydowns
Some buyers use a portion of their savings to buy down their interest rate by 0.25–0.50%, reducing their monthly payment for the life of the loan. When combined with CHFA's down payment assistance, this can make homeownership more affordable than renting in many Colorado markets.
Common CHFA Misconceptions
- "I make too much money." With limits up to $130,400 for a 1–2 person household, most working professionals qualify.
- "It takes too long." CHFA loans close on the same timeline as standard mortgages — 21–30 days is typical.
- "The rates are higher." CHFA rates are competitive with market rates. Any slight premium is offset by the free down payment assistance.
- "I can only buy a cheap house." Purchase price limits vary by county. In the Denver metro, you can purchase homes well above $500,000 with CHFA financing.
How to Get Started with CHFA
- Check your eligibility: Use the CHFA eligibility calculator for a quick estimate
- Complete homebuyer education: Take an approved course online (plan for 4–8 hours)
- Connect with a CHFA-participating lender: Not all lenders offer CHFA — you need one who is approved and experienced with the program
- Get pre-approved: We'll run the numbers to determine which CHFA program gives you the best combination of rate, assistance, and monthly payment
Cedar Home Loans is a CHFA-participating lender with deep experience helping Colorado first-time buyers access down payment assistance. Contact us today or call (970) 368-6135 to find out which CHFA program fits your situation.
