Buying a home in Colorado can feel like an uphill climb, especially when home prices are high and saving for a down payment seems out of reach. But here’s some good news: Colorado offers a wide range of Down Payment Assistance (DPA) programs designed to help first-time and repeat buyers bridge that gap. These programs can cover part (or all) of your down payment and even your closing costs, making homeownership far more attainable.
The key is knowing which DPA program fits your unique situation best. Here’s a comprehensive guide to help you choose the right one, step by step.
Step 1: Understand What a DPA Program Is
A Down Payment Assistance (DPA) program provides financial help to cover the upfront costs of buying a home, typically the down payment and sometimes closing costs.
In Colorado, these funds may come in the form of:
- Grants: Free money that doesn’t need to be repaid.
- Deferred Loans: No monthly payments; repayment happens only when you sell, refinance, or pay off the mortgage.
- Forgivable Loans: Loans that are forgiven over time if you stay in the home for a certain number of years (often 3–10).
- Second Mortgages: Low-interest loans added to your primary mortgage.
Understanding these structures helps you avoid surprises later and choose a program that fits your long-term financial goals.
Step 2: Know the Big Players in Colorado’s DPA Landscape
There are several trusted statewide and regional organizations offering DPA in Colorado. Here are the top ones to consider:
1. CHFA (Colorado Housing and Finance Authority)
CHFA is the most well-known source of down payment assistance in Colorado. They offer:
- Down Payment Assistance Grant: Up to 3% of your first mortgage amount, no repayment required.
- Down Payment Assistance Second Mortgage: Up to 4% of your first mortgage, repaid only when you sell or refinance.
To qualify, buyers must take a homebuyer education class, meet income and credit score requirements (typically credit score ≥ 620), and use a CHFA-approved lender.
2. MetroDPA (Denver Metro Area)
The Metro Down Payment Assistance Program helps buyers in Denver and surrounding counties.
- Offers up to 6% of the loan amount as a forgivable down payment assistance grant.
- No first-time buyer requirement.
- Forgiven after three years if you stay in the home.
This program is especially appealing if you’re buying within the Denver Metro area, where home prices are higher.
3. El Paso County Turnkey Plus Program
If you’re buying in Colorado Springs or El Paso County, this program offers up to 4% of the loan amount as a grant.
- Available for FHA, VA, USDA, and conventional loans.
- Minimum credit score of 640.
Turnkey Plus is popular for its flexibility and competitive rates.
4. Local City Programs
Many Colorado cities and counties have their own DPA initiatives:
- City of Boulder – Homeownership Program: Offers loans of up to $40,000 for down payment or closing costs.
- Douglas County Housing Partnership: Offers up to 4% of the purchase price in assistance.
- Adams County, Aurora, Fort Collins, and Pueblo also have local programs worth exploring.
When comparing, make sure to check the eligibility boundaries; some are restricted by zip code or city limits.
Step 3: Check the Eligibility Requirements
Each program has specific rules about income limits, credit scores, and home price caps. For example:
- CHFA: Income limit of around $150,000, depending on location and household size.
- MetroDPA: Income limit of $176,700 for most borrowers.
- Turnkey Plus: Typically capped at around $130,000.
If your income is too high for one program, you might qualify for another. Also, many programs require that the property be your primary residence and that you complete an approved homebuyer education course.
Step 4: Compare the “Strings Attached”
Not all free money is equal. Some programs are grants with no repayment, while others are silent seconds, loans you’ll repay when you sell or refinance.
If you think you might move or refinance in the next few years, a grant or forgivable loan might be better than a deferred one.
Step 5: Match Your Loan Type with the Right Program
Most Colorado DPAs pair with specific mortgage types, typically FHA, VA, USDA, or conventional loans.
- CHFA works with FHA, VA, USDA, and Conventional loans.
- MetroDPA works mainly with conventional and FHA.
- Turnkey Plus allows multiple loan types.
Ask your lender to confirm that your preferred program aligns with your mortgage product.
Step 6: Compare Long-Term Costs
Even if a program gives you “free money,” it might come with higher interest rates or mortgage insurance premiums. For example, a CHFA loan may have a slightly higher rate than a standard FHA loan without assistance.
Always compare your total monthly payment and total cost over 5–10 years, not just the upfront benefit. Sometimes, saving $10,000 upfront can cost you more in the long run if the interest rate is higher.
Step 7: Get Pre-Approved with a Participating Lender
Not every lender offers every DPA program. You’ll need to work with a participating lender approved by the program you choose.
- CHFA has a list of approved lenders on their site.
- MetroDPA also maintains a list of local partners.
During pre-approval, the lender will review your income, credit, and goals to help determine which DPA programs you qualify for.
Step 8: Consider Combining Assistance Programs
In some cases, you can stack assistance programs, using a local DPA along with a state-level one. For instance, a borrower might combine a CHFA first mortgage with a city or employer assistance grant.
However, stacking is subject to program rules and lender approval, so always confirm that multiple sources of aid can work together.
Step 9: Don’t Forget Education Requirements
Most DPA programs require a homebuyer education course, which teaches you about budgeting, mortgages, and maintaining your home.
- CHFA offers free online and in-person classes.
- MetroDPA and others accept HUD-approved courses.
These classes are worth your time; they help ensure you’re financially prepared for homeownership and improve your chances of long-term success.
Step 10: Plan Beyond the Purchase
A good DPA program helps you buy your home, but financial success comes from what you do after. Budget for maintenance, taxes, and unexpected costs.
That’s where tools like Homebuyer Wallet come in, helping you save, plan, and find programs (like CHIPs) that make the buying process easier.
If you’re at Step 5: Saving to Buy a House, Homebuyer Wallet can help you track progress, explore programs, and make your dream home a reality.
Final Thoughts
Colorado homebuyers have more support than they might realize. With strong statewide programs like CHFA, MetroDPA, and Turnkey Plus, plus dozens of local and employer-based grants, there’s likely a program that fits your financial situation and goals.
The key is to compare carefully, look beyond the dollar amount to understand repayment terms, long-term costs, and eligibility requirements.
And remember, you don’t have to do it alone. Work with an experienced lender familiar with DPA programs, and use resources like Homebuyer Wallet to make the process smoother.
With the right program and a bit of preparation, your path to homeownership in Colorado could be closer than you think.
