Great Down Payment Assistance Loans
If you want to buy a house, but you have very little money saved for a down payment, a great way to do that is with a Colorado Housing and Finance Authority (CHFA) mortgage. And here is some great news: with recent changes, these loans are available to many more people than before.
Down Payment Assistance
CHFA offers down payment assistance. They will either give you the money or lend you the money for the required down payment. If you get a conventional loan, the required down payment is 3% of the purchase price. If you get an FHA loan, the down payment requirement is 3.5% of the purchase price. Regardless of which type of loan you get, there are two options to cover the down payment.
The first option is to get a grant. CHFA will give you 4% of the loan amount as a grant that does not have to be paid back. If your down payment is 3% or 3.5%, the 4% that CHFA gives you will be enough to cover the entire down payment.
The second option is to get an interest-free loan for 5% of the first loan amount. The loan will be more than enough to cover the down payment, and it doesn’t have to be paid back until the first loan is paid off or refinanced. There are no monthly payments for the second loan, and there is no interest.
With either option – the grant or the loan – there will be money left over that can be used to pay for some of your closing costs.
CHFA only requires you to contribute $1,000 towards the transaction. The best part is that the $1,000 does not even have to be from your own funds. It can be a gift from a relative.
There are income limits with CHFA loans. If you make more than the income limits, you do not qualify for a CHFA loan. However, the limits were recently changed, and now, for most of CHFA’s loan programs, the income limit is $115,600. This is considerably higher than the old limits.
And one last thing: CHFA loans are NOT just for first-time home buyers!
CHFA loans are great loans if you don’t have all the money for the down payment and closing costs. Remember, everyone pays the same interest rate for a CHFA loan, regardless of which lender you use. No lender has a better “deal” on CHFA loans than other lenders do. Call us if you think a CHFA loan might be best for you and we’ll make your home buying experience easy and enjoyable.