Housing prices are on the rise in Colorado making it more challenging than ever to become a first-time homeowner.
Thankfully, the Colorado Housing and Finance Agency (CHFA) has several home buyer programs and grants for down payment and closing cost assistance for first-time homebuyers.
National First-Time Homebuyer Loan Programs
- FHA Loans – FHA home loans are very popular with first-time homebuyers cause they require a 580 credit score with just a 3.5% down payment. Debt-to-income ratios up to 50% are allowed making them perfect for low-income borrowers.
- Conventional Loans – Conventional loans require a 620 credit score and a 5% to 20% down payment. If you put 20% or more down, mortgage insurance will not be required.
- USDA Loans – USDA mortgage loans are for low-to-median income borrowers buying a home located in a USDA-eligible rural area. They provide 100% financing with a 620 or higher credit score. Mortgage insurance is required but the rate is the lowest of any type of mortgage program available.
- VA Loans – Veterans of the U.S. military may be eligible for a VA home loan. No down payment or mortgage insurance is required and veterans with a 580 to 620 credit score are eligible.
- HomeReady and Home Possible Loans – Freddie Mac and Fannie Mae created the HomeReady and Home Possible loan programs for low-income first-time homebuyers whose income does not exceed 100% of the area median income requiring just a 3% down payment and a 620 credit score.
California First-Time Home Buyer Programs
CHFA offers down payment assistance and grants to first-time home buyers. You must meet the minimum requirements for a mortgage.
- Minimum 620 credit score
- Take a home buyer education course
- Income cannot exceed 100% of the area median income (AMI)
- Up to 3% to use for your down payment
- No repayment required