Saving for a down payment is one of the biggest obstacles to buying a home — especially in Colorado’s competitive market. The good news? Many buyers qualify for down payment assistance (DPA) without realizing it.
Here’s how Colorado’s programs work and how they can help you buy sooner than you think.
What Is Down Payment Assistance?
Down payment assistance provides funds to help cover:
- Down payment
- Closing costs
- Or both
These funds typically come in the form of:
- Grants
- Second mortgages with low or no payments
- Deferred loans that don’t have to be paid back until you sell or refinance
Most programs are designed for:
- First-time buyers
- Moderate-income households
- Buyers purchasing a primary residence
Colorado Housing and Finance Authority (CHFA)
The largest statewide program is through CHFA (Colorado Housing and Finance Authority).
CHFA offers:
- Competitive first-mortgage rates
- Down payment assistance up to 4% of the loan amount
- FHA, VA, USDA, and Conventional options
The assistance is usually structured as a second mortgage with:
- 0% interest
- No monthly payment
- Repayment due when you sell, refinance, or pay off the first mortgage
Colorado Housing Assistance Corporation (CHAC)
Colorado Housing Assistance Corporation (CHAC) is one of Colorado’s most widely used nonprofit down payment assistance programs. It helps buyers bridge the gap between what they have saved and what they need to purchase a home.
CHAC is especially popular because it can work alongside conventional, FHA, and VA loans, and it’s available to both first-time and repeat buyers in many cases.
What CHAC Provides
CHAC offers down payment and closing cost assistance in the form of a second mortgage that sits behind your primary loan.
Typical benefits include:
- Up to 4% of the purchase price (varies by program and income)
- Can be used for:
- Down payment
- Closing costs
- Prepaid items (taxes, insurance, etc.)
This often allows buyers to purchase with little to no money out of pocket, even on conventional loans.
How CHAC Works
CHAC assistance is structured as a second mortgage with very favorable terms:
- 0% interest
- No monthly payment
- Repaid only when:
- You sell
- Refinance
- Or pay off the first mortgage
That means it doesn’t increase your monthly housing payment — it simply sits quietly in the background until the home is eventually sold or refinanced.
Who Can Use CHAC?
CHAC is designed for moderate-income buyers, but the income limits are much higher than many people expect.
In general, you must:
- Buy a primary residence in Colorado
- Stay within income limits (often well into the six figures in many Front Range counties)
- Meet basic credit and underwriting guidelines for the first mortgage
Both first-time buyers and repeat buyers can qualify in many cases.
Why Realtors and Buyers Like CHAC
CHAC stands out because:
- It works with conventional, FHA, and VA loans
- It allows competitive offers with less cash
- It helps buyers keep their reserves instead of draining savings
- It doesn’t raise monthly payments
In competitive markets like Denver, Aurora, and the Front Range, CHAC often makes the difference between being able to buy now versus sitting on the sidelines for another year.
CHAC vs. CHFA — Which Colorado Down Payment Program Is Better?
| Feature | CHAC | CHFA |
|---|---|---|
| Program Type | Non-profit assistance program | State housing finance agency |
| Works With | Conventional, FHA, and VA loans | CHFA Conventional, CHFA FHA, CHFA VA |
| Down Payment Help | Up to 4% of purchase price | Typically 3%–4% depending on program |
| Form of Assistance | 0% interest second mortgage | Second mortgage or grant |
| Monthly Payment? | None | Sometimes (depends on program) |
| Repayment | When you sell, refinance, or pay off the first loan | Either forgiven over time or repaid, depending on structure |
| Income Limits | Moderate to high (often higher than CHFA) | Stricter income limits |
| Homebuyer Education | Required | Required |
| Who It’s Best For | Buyers who want lower monthly payments and flexibility | Buyers who want grants or rate-controlled programs |
The Real-World Difference
CHAC is usually best for buyers who:
- Want a conventional or FHA loan
- Have decent income but limited savings
- Want to avoid higher monthly payments
CHFA is often better for buyers who:
- Need rate assistance
- Have lower income
- Prefer a forgivable grant instead of a second lien
Neither program is “better” — they’re designed for different buyer profiles. The right choice depends on credit, income, cash on hand, and the home you’re buying.
Local City and County Programs
In addition to CHFA, many Colorado cities and counties offer their own assistance programs. These may include:
- Denver
- Aurora
- Thornton
- Adams County
- Arapahoe County
- Douglas County
- Boulder County
Local programs often provide:
- Extra grants on top of CHFA
- Forgivable loans
- Income-based assistance
These programs can change frequently and have limited funding — which is why it’s important to check availability when you’re ready.
Do You Have to Be a First-Time Buyer?
Often, yes — but “first-time buyer” doesn’t always mean what you think.
In most programs, you’re considered a first-time buyer if you:
- Haven’t owned a home in the past 3 years, or
- Are buying in a targeted area, or
- Are using certain government-backed loans
Many people who owned a home years ago still qualify.
What Are the Tradeoffs?
Down payment assistance is incredibly helpful, but it’s important to understand:
- Interest rates may be slightly higher
- There may be resale or refinance restrictions
- You usually need to complete a short homebuyer education course
For many buyers, the benefit of getting into a home sooner outweighs these tradeoffs — but it should always be reviewed carefully.
How Much Could You Get?
Depending on the program and loan type, assistance can range from:
- A few thousand dollars
- To tens of thousands in combined down payment and closing cost support
That can be the difference between waiting years… or buying now.
The Bottom Line
If you’re renting and struggling to save for a down payment, you may already qualify for help. Colorado has some of the strongest assistance programs in the country — but most buyers never hear about them until they talk to a lender who works with them regularly.
Want to know what programs you qualify for?
I can check:
- CHFA eligibility
- City and county programs
- Loan type options
It takes just a few minutes and can change your entire buying timeline.