Colorado first-time homebuyer assistance programs

Whether you’re looking for the downtown energy of Denver or hoping for the peace and tranquility of a remote mountain town, Colorado offers plenty of opportunities to spend more time outside. Buying a home here isn’t easy, though, especially for first-time homebuyers on a budget. As of January 2025, the median home sales price in the state rose just over 2 percent from the year prior, to $606,800, according to Redfin. If you’re looking for your first home, the state’s housing finance agency, the Colorado Housing and Finance Authority (CHFA), offers many programs that can make the dream of owning a home a more affordable reality.

Colorado first-time homebuyer loan programs

CHFA FirstStep and FirstStep Plus

CHFA’s FirstStep and FirstStep Plus programs provide a 30-year fixed-rate FHA loan to first-time homebuyers, veterans or any buyer purchasing in a targeted area, along with down payment assistance if needed. If you’re a first-generation homebuyer — meaning the first member of your family to own a home — you can also explore CHFA’s FirstGeneration and FirstGeneration Plus programs, which are nearly identical to FirstStep.

• Requirements

  • 620 minimum credit score (although the program also considers those who don’t have a credit score)
  • Must be a first-time homebuyer or a qualified veteran — unless you’re buying in a targeted area
  • Must not exceed the 50 percent debt-to-income (DTI) ratio limit with a mid-FICO of 620 to 659, or 55 percent DTI limit with a mid-FICO of 660 or higher
  • Must complete a homebuyer education class
  • Must not exceed income and purchase price limits
  • Must contribute at least $1,000 to the purchase

• Pros and cons

  Pros

  • Will consider borrowers with no credit score
  • CHFA’s lowest-rate mortgage program
  • Open to first-time and repeat buyers (if buying in a target area)

  Cons

  • FHA loans only
  • Must contribute $1,000 of own funds to the purchase
  • Does not allow co-signers

CHFA SmartStep and SmartStep Plus

CHFA SmartStep and SmartStep Plus offer the ability to use other types of government-backed loans, including USDA and VA loans. Plus, this program has a more appealing down payment assistance option: a grant instead of a second mortgage.

• Requirements

  • 620 minimum credit score (although the program also considers those who don’t have a credit score)
  • Must not exceed the 50 percent debt-to-income (DTI) ratio limit with a mid-FICO of 620 to 659, or 55 percent DTI limit with a mid-FICO of 660 or higher
  • Must complete a homebuyer education class
  • Must not exceed income limit of $162,960
  • Must contribute at least $1,000 to the purchase

• Pros and cons

  Pros

  • No purchase price limits
  • Ability to get a grant for down payment assistance that never needs to be repaid
  • Open to first-time and repeat buyers

  Cons

  • No co-signers
  • Must contribute 1 percent of purchase price in own funds

CHFA Preferred and Preferred Plus

CHFA Preferred and Preferred Plus are similar to CHFA’s FirstStep, but there are unique nuances. You can get a conventional loan with this program, which means you can eventually get rid of private mortgage insurance when you reach 20 percent equity in your home.

• Requirements

  • 620 minimum credit score (although the program also considers those who don’t have a credit score)
  • Must not exceed the 50 percent debt-to-income (DTI) ratio limit with a mid-FICO of 620 to 659, or 55 percent DTI limit with a mid-FICO of 660 or higher
  • Must complete a homebuyer education class
  • Must not exceed income limits
  • Must contribute at least $1,000 to the purchase

• Pros and cons

  Pros

  • Open to multiple property types, including accessory dwelling units (ADUs)
  • Open to first-time and repeat buyers
  • No purchase price limits

  Cons

  • No co-signers allowed
  • Must contribute $1,000 to the purchase with your own funds

CHFA SectionEight

CHFA’s SectionEight and SectionEight Plus Homeownership programs can provide a 30-year fixed-rate FHA or USDA loan to a first-time homebuyer or veteran who’s also receiving Section 8 assistance from a Section 8 agency.

• Requirements

  • 620 minimum credit score
  • Must be a first-time buyer or qualified veteran
  • Must not exceed the 50 percent debt-to-income (DTI) ratio limit with a mid-FICO of 620 to 659, or 55 percent DTI limit with a mid-FICO of 660 or higher
  • Must complete a homebuyer education class
  • Must not exceed income limit of $162,960

• Pros and cons

  Pros

  • Lower minimum contribution required ($750, or $500 with ACH payment)
  • No purchase price limits
  • Open to multiple property types, including accessory dwelling units (ADUs)

  Cons

  • All loans are manually underwritten (which isn’t nearly as fast as automated underwriting)
  • No FHA 203(k) loans permitted

Colorado down payment assistance

CHFA down payment assistance

CHFA offers two types of down payment assistance: a second mortgage or a grant. CHFA’s zero-percent second mortgage provides assistance funds up to $25,000 or 4 percent of your first mortgage (whichever is less). You don’t have to repay this assistance until you pay off or refinance the first mortgage or sell your home.

The grant program provides the lesser of $25,000 or 3 percent of the purchase price, but it’s not available to all borrowers. Only those with a SmartStep or Section 8 Homeownership loan can choose the grant option.

• Pros and cons

  Pros

  • Second mortgage does not charge interest
  • No repayment required with grant option

  Cons

  • Grant program comes with higher rate on your mortgage
  • Second mortgage option comes with higher interest rate

Other Colorado homebuyer assistance programs

MetroDPA

If you’re buying in one of many cities across the Front Range, the metroDPA program can help you come up with funds for the down payment and closing costs. You’ll be able to borrow a percentage of the purchase price as a zero-interest second mortgage.

• Requirements

  • 640 credit score (some borrowers may be approved with a 620)
  • Cannot earn more than $195,600 per year
  • Must buy a home in an approved area, which include towns/areas in the following counties: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, Jefferson, Larimer

• Pros and cons

  Pros

  • No scheduled payments
  • Pairs with conventional, FHA, USDA or VA loans
  • No interest

  Cons

  • Need to repay the loan when the mortgage is paid off or you sell the home

Colorado Housing Assistance Corporation

The Colorado Housing Assistance Corporation offers loans for down payment and closing costs throughout the state, which can help you borrow between $5,000 and $12,000 for upfront homebuying costs.

• Requirements

  • Must meet income and purchase price limits
  • Must attend a first-time homebuyer class
  • Must complete borrower counseling that is separate from a first-time homebuyer class

• Pros and cons

  Pros

  • Includes an option to defer interest for the first five years
  • Borrowers with disabilities can defer repayment for 30 years and enjoy lower interest rates

  Cons

  • Rates vary from 3 percent to 5 percent for most borrowers
  • Additional fees may include monthly service fee, commitment fee, wiring fee and document preparation fee

Other first-time homebuyer loan programs

As you shop around for a mortgage, consider also looking into nationally available first-time homebuyer loan programs, as well, such as:

• FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
• VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
• USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
• Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

Ready to take the next step toward buying a house in Colorado? Put these items on your to-do list.

• Compare Colorado mortgage rates: All lenders are not created equal. Look at a few offers to see where you’ll find the lowest rates.
• Read Colorado mortgage lender reviews: It’s not just about the rate you’ll get; you’ll also want to know about fees, closing timelines and customer service. Take a look at what other borrowers are saying about how they like their lender.
• Estimate your homeowners insurance costs: Make sure you estimate how much you’ll have to pay to protect your property, and compare policies to pick the right one for your housing needs.
• Educate yourself on how to buy a home in Colorado: Get a crash course on the local housing market, and familiarize yourself with all the closing costs you’ll need to pay to get the deal done.
• Get your credit in the best shape possible: Don’t just focus on meeting the minimum credit score requirements for a mortgage. While CHFA’s programs all require a minimum score of 620, you’ll stand to save a lot of money the higher you can get your score.

• Explore other first-time homebuyer programs by state

  Alabama first-time homebuyer programs	Montana first-time homebuyer programs
  Alaska first-time homebuyer programs	Nebraska first-time homebuyer programs
  Arizona first-time homebuyer programs	Nevada first-time homebuyer programs
  Arkansas first-time homebuyer programs	New Hampshire first-time homebuyer programs
  California first-time homebuyer programs	New Jersey first-time homebuyer programs
  Colorado first-time homebuyer programs	New Mexico first-time homebuyer programs
  Connecticut first-time homebuyer programs	New York first-time homebuyer programs
  Delaware first-time homebuyer programs	North Carolina first-time homebuyer programs
  Florida first-time homebuyer programs	North Dakota first-time homebuyer programs
  Georgia first-time homebuyer programs	Ohio first-time homebuyer programs
  Hawaii first-time homebuyer programs	Oklahoma first-time homebuyer programs
  Idaho first-time homebuyer programs	Oregon first-time homebuyer programs
  Illinois first-time homebuyer programs	Pennsylvania first-time homebuyer programs
  Indiana first-time homebuyer programs	Rhode Island first-time homebuyer programs
  Iowa first-time homebuyer programs	South Carolina first-time homebuyer programs
  Kansas first-time homebuyer programs	South Dakota first-time homebuyer programs
  Kentucky first-time homebuyer programs	Tennessee first-time homebuyer programs
  Louisiana first-time homebuyer programs	Texas first-time homebuyer programs
  Maine first-time homebuyer programs	Utah first-time homebuyer programs
  Maryland first-time homebuyer programs	Vermont first-time homebuyer programs
  Massachusetts first-time homebuyer programs	Virginia first-time homebuyer programs
  Michigan first-time homebuyer programs	Washington first-time homebuyer programs
  Minnesota first-time homebuyer programs	Washington D.C. first-time homebuyer programs
  Mississippi first-time homebuyer programs	West Virginia first-time homebuyer programs
  Missouri first-time homebuyer programs	Wisconsin first-time homebuyer programs
  Wyoming first-time homebuyer programs