Home Loan and Down Payment Assistance Programs : metroDPA Social Equity, Colorado Housing and Finance Authority (CHFA); Colorado Housing Assistance Corporation (CHAC)

Home Loan and Down Payment Assistance Programs
metroDPA | metroDPA Social Equity | CHAFA | CHAC

Promoting homeownership in our community can help build generational wealth, strengthen the Front Range and bring stability to its residents. At the end of the day, everyone has to love somewhere and for those who aspire to own a home and start building equity for themselves instead of paying rent year after year and helping their landlord pay their mortgage and build wealth, I am committed to helping my community achieve the American Dream. There are several programs available for Colorado residents who need help with a down payment. Programs are typically split between Statewide and local City programs and are basically regular fixed FHA and/or conventional loans with an additional 2nd mortgage or grant to help cover the down payment and in some cases closing costs. Some programs offer grants which do not need to be paid back at all. Having a decent credit score is very helpful but not always required. Alternative credit such as rent, utilities and cell phone bills can be used for individuals who lack tradition credit. Homebuyers will typically be required to invest $1,000 up to 1% of the purchase price and your family can also contribute "gift funds".

What is metroDPA?
Metro Down Payment Assistance (metroDPA) is a program sponsored by the City & County of Denver helping people throughout the Front Range become homeowners. It provides a home loan and down payment assistance to help people become homeowners throughout the greater Denver metropolitan area.

Who is Eligible?
For metroDPA: Anyone making up to $176,700/year with minimum credit score of 640 are eligible for a home loan and down payment assistance to purchase a home throughout the greater Denver metropolitan area.

For metroDPA Social Equity: Residents and direct descendants (the child or grandchild) of residents who lived in a Denver neighborhood that was redlined between 1938 and 2000 are eligible for the metroDPA Social Equity program. The metroDPA Social Equity program was specifically designed to help residents who lived in areas that were historically targeted by discriminatory lending practices like redlining*. Denver Department of Housing Stability (HOST) is strongly committed to equity and utilizing data and programs to ensure that race is no longer a predictor of housing outcomes. Proof of eligibility must be supplied to the Denver Department of Housing Stability (HOST) and is subject to approval by HOST. If someone qualifies, they may be eligible to receive $15,000 or $25,000 (depending upon their income) and must be approved to use a metroDPA home loan. * Redlining is the practice of denying a creditworthy applicant a loan for housing in a certain neighbor hood even though the applicant may otherwise be eligible for the loan.

Is this FREE assistance only available to first-time buyers?
No. Everyone is encouraged to participate!

Do I have to live in Denver or buy a home in Denver to apply?
No. The metroDPA and metroDPA Social Equity programs are available to qualified applicants so long as the home they are purchasing is located in greater Denver metropolitan area (full list of cities & counties available).

How does the program work and how much can I get towards a down payment?
For metroDPA: Assistance up to a percentage of the home loan (first mortgage loan) amount for your down payment in the form of an interest-free, 3-year forgivable second mortgage – there are no scheduled payments and you don’t have to pay the assistance loan (second mortgage) back if you stay in the home for three years!

For metroDPA Social Equity: If you are eligible and approved for the metroDPA Social Equity program, you may be eligible for $15,000 or $25,000 towards your down payment or closing costs. This is also an interest-free, 3-year forgivable assistance loan (second mortgage). The home loan available for the Social Equity program is the metroDPA’s lowest available interest rate for the type of home loan. As of July 2023, this SE portion of the program is currently no longer accepting applications. We will let you know when additional funding for this program becomes available.

Does this program have any other requirements?
You must use a metroDPA-approved lender to obtain a 30-year fixed rate home loan (first mortgage) in order to receive down payment assistance. The mortgage can be FHA, VA or USDA loan or a conventional loan and will be determined in cooperation with your lender. Not all mortgage lenders have the expertise to navigate through this program. If you need to determine if your lender is a metroDPA-approved or if you need a referral to a local mortgage lender who is, please contact Anthony Rael at 303.520.3179

What is a second mortgage?
The assistance loan is in the form of a second mortgage, which creates a lien on the property for a specific amount of time. In this case, the amount of time is three years after the date of closing on the home. The loan is forgiven over a three year period. You may sell or refinance your home before the end of the three years and only repay the unforgiven portion on a pro-rated basis.

What does "forgivable" second mortgage mean?
Over the first three years (36 months) of ownership, the down payment assistance is forgiven 1/36th each month. After the third anniversary (36 months) of closing, you will not have to repay any portion of the assistance you received. If you sell or refinance before the 36 months is up, you must pay back the remaining portion of the loan. Example: A borrower received $10,000 in assistance and 28 months after closing they decide to refinance their home. They are going to owe back a portion of the assistance they received. Remember, the assistance is forgiven at 1/36th per month which means, in month 28 after closing, $7,777 of the $10,000 amount has been forgiven. So, the borrower will owe $2,223 when they refinance or sell their home.

What can the down payment assistance funds be used for?
The assistance may be used for the down payment required by FHA, Conventional, USDA and VA loans. The assistance may also be used for customary closing costs, pre-paids or principal reduction of the home loan. The assistance funds cannot be used to pay the difference between the sales price and appraised value (aka "appraisal gap"), to pay down any borrower’s debt or any portion of the real estate agent's compensation or any scenario where the homeowner would receive any cash back.

Colorado Housing and Finance Authority (CHFA)
CHAFA Down Payment and/or Closing Cost Assistance Options
Homebuyers using one of our first mortgage loan programs to finance their home purchase are eligible to use CHFA assistance options to help with down payment and/or closing costs. Even if you contribute towards a down payment, you may still use one of the options below.

Down Payment Assistance Grant
Up to the lesser of $25,000 or 3 percent of your first mortgage
(Example: Get up to $6,000 on a $200,000 mortgage)
No repayment required, but a higher interest rate will apply

Second Mortgage Loan
Up to the lesser of $25,000 or 4 percent of your first mortgage
(Example: Get up to $8,000 on a $200,000 mortgage)
Repayment of loan balance deferred until certain events, such as payoff of your first mortgage, or the sale or refinance of the home, or the home is no longer your primary residence.

Colorado Housing Assistance Corporation (CHAC)
CHAC’s Mortgage Assistance Programs: Buying a home is a big step and comes with many choices. However, figuring out how to secure the down payment can be tough. This is where the Colorado Housing Assistance Corporation (CHAC) comes in. They offer a range of Mortgage Assistance Programs to help with the upfront financial part, especially for people buying a home for the first time in Colorado. Here are the details of these programs:

CHAC Statewide Program - Immediate Payback

Loan Amount: Up to 6% of the lesser between sales price or appraised value, capped at $12,000.
Loan Range: Loans between $5,000 to $12,000, amortized over 360 months.
Interest Rate: A manageable rate of 3%.

CHAC Statewide Program - 5-year Deferral

​Loan Amount: Mirroring the Immediate Payback program with a cap of $12,000.
Interest Structure: A 5-year interest-free period followed by a 5% interest rate for the subsequent 25 years.

CHAC Disability Program:

Eligibility: Individuals with permanent disabilities or those with a child with a permanent disability.
Loan Amount: A maximum of $10,000.
Interest Rate & Term: 0% interest rate, 1% APR for a term of 30 years with payment deferred.

* Common Features Across All CHAC Programs
* Income Eligibility: Comprehensive evaluation of all income sources for all household members.
* Co-borrowing Regulations: Non-resident co-borrowers or co-signers are not permitted.
* Property Eligibility: Excluding properties tenant-occupied within 90 days prior to closing.
* Educational Requirements: Mandatory First-Time Homebuyer class and Borrower Counseling Session prior to closing.

​These programs are carefully crafted to smooth your way into home ownership while keeping your financial plan steady. It’s more than just getting a loan; it’s about taking a well-informed, confident step into your future.
 

Interested in any of these down payment assistance programs?
Reach out to Anthony Rael at 303.520.3179 (text is fine) or use my contact form to submit a request online. We'll talk about your desire to become a homeowner and getting you started on the pre-approval process with a reputable local mortgage lender so you will know exact how much you can afford and which program you may be qualified for.