CHFA loans are mortgage programs designed specifically for first-time homebuyers in Colorado. The Colorado Housing and Financing Authority (CHFA) offers assistance to those looking for money to help with a down payment or closing costs. You can also use CHFA loans to improve your credit score and build equity.
Even if you’re not buying for the first time, CHFA offers flexible loan programs to any Coloradan, many with fixed-rate financing. Plus, you’ll work with a CHFA lender who understands the ins and outs of the program and whether you could benefit from it. Do what you can to familiarize yourself with CHFA loans and their role in the home buying process.
A CHFA mortgage may be for you if you have:
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Limited income that falls within the CHFA guidelines for your household size
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Not enough savings to make a down payment or cover closing costs
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A mid-credit score minimum of 620
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Maximum debt-to-income (DTI) of 50% (may be 55% if credit score is 660 or higher)
Advantages
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Down payment assistance
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Affordable rates
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30-year fixed-rate mortgages
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Support with closing costs
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No/low mortgage insurance
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Free homebuyer education/money management classes*
Disadvantages
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Income limits based on household size, location, CHFA loan program, and other factors
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CHFA borrowers could face limitations when refinancing
How to qualify for a CHFA loan
You’ll need to meet several requirements to qualify for CHFA loans. First, you must have a mid-credit score of 620 or higher. If you don’t, check out the various CHFA resources available to help you boost your score and qualify for this loan program sooner than later.
Next, the total borrower income must not exceed the program's income limits. For example, borrowers looking to buy a house in Denver will need to adhere to the income limit of $52,400 with the CHFA Preferred Very Low Income Program (VLIP). Remember that income limits vary by location and program type.
Borrowers who meet the income and credit score requirements must also come up with a $1,000 down payment. You can use your own funds, a cash gift from a loved one, or both. You aren’t limited to this amount, either, if you want to put more down and lower your monthly payment.
The last thing you’ll need to do to qualify for CHFA loans is to attend an approved homebuyer education class. This course will prepare you for the responsibilities of homeownership and includes sessions about money management, the home buying and mortgage processes, and other important topics. You must complete the course (online or in-person) before closing day.
The above steps can seem daunting at first without someone by your side. That’s why it’s critical to find a CHFA Participating Lender as early as possible. This person will not only match you with the best loan program but also guide you through the entire process and answer any questions you may have.
Different CHFA loan programs
There are a variety of programs within CHFA loans. Speak with one of our CHFA salary-based mortgage consultants to check the most current eligibility requirements for each program to determine which one is the best fit for you.
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CHFA Advantage℠
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CHFA Preferred℠
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CHFA Advantage℠ Refinance
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CHFA Preferred℠ Refinance
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CHFA FirstStep℠
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CHFA SmartStep℠
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CHFA HomeOpener℠
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CHFA HomeAccess℠
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CHFA SectionEight℠ Homeownership
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CHFA FHA Streamline Refinance
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CHFA MCC℠
CHFA can help Coloradans with down payment assistance, allowing them to get into a house for as little as $1,000 down. Some borrowers may even be able to avoid mortgage insurance. Access to CHFA loans and their advantages is dependent on household income, which is largely determined at the county level and by household size.
Additionally, there are also down payment assistance grants and zero-percent second mortgage loans that help to cover down payment requirements and closing costs.
As someone interested in exploring CHFA loans for your home purchase, understand that CHFA is the loan servicer. That means they take over the loan after you complete the mortgage process with a participating CHFA lender, like American Financing. So, if you ever have questions about your loan in the future, contact CHFA and not your original lender.
We’re proud to say that American Financing is an approved and top-producing CHFA lender. Our salary-based mortgage consultants will get you pre-qualified and ensure you receive the right loan program for your needs and budget. Call us at (866) 891-7332, or complete the online application to work with an experienced CHFA lender who puts customers first.
*The homebuyer education class is required and must be completed before closing. It can be completed online or in person. The curriculum includes a discussion of key players and their roles in the home buying process, successful money management tips, taxes and insurance, consumer laws, steps in the mortgage process, protecting your investment, and the true cost of homeownership, among other topics.
