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Quick Answer: Colorado's down payment assistance programs provide 3%–4% of the home loan as a deferred 0% second mortgage — effectively covering the FHA down payment entirely for qualifying buyers. Requirements: 620+ credit score (CHFA), income within county AMI limits, primary residence purchase. With CHFA DPA, a buyer's out-of-pocket drops from $30,000–$47,000 to $15,000–$23,000 (closing costs + reserves). Combined with seller concessions, buyers can close for as little as $7,800–$12,000 in some scenarios. |
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$0 Down payment possible With DPA covering 3%–4% of loan |
3%–4% DPA amount Of first mortgage loan balance |
~$19,800 Minimum total cash FHA + CHFA DPA on $400K home |
Down payment assistance (DPA) is money provided by a government agency, nonprofit, or lender to help a homebuyer cover part or all of the down payment on a home purchase. In Colorado, DPA is most commonly structured as a second mortgage — a separate loan, subordinate to your primary mortgage, that covers your down payment requirement.
The critical distinction that most buyers don't understand: DPA is usually not free money in perpetuity. It is either repaid at a future point (from your equity when you sell or refinance) or forgiven over time if you meet residency requirements. The financial structure determines when and how much, if anything, you pay back.
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DPA Type |
Repayment |
Colorado Examples |
Residency Req. |
Key Consideration |
|---|---|---|---|---|
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True Grant |
Never — free money |
Up to $15,000 (NeighborhoodLIFT when active); some city programs |
When available — scarce |
Best if available; doesn't affect monthly costs or future equity |
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Deferred 0% Loan |
At sale, refinance, or payoff — from equity |
CHFA: 3%–4% of first mortgage loan |
No restriction — use as long as you own |
Most common; 0% interest means zero cost until exit; comes from equity gain |
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Forgivable Loan |
Forgiven over 5–10 years if you stay; $0 if terms met |
NeighborhoodLIFT ($15K over 5 yrs); some city programs |
Stay in home for forgiveness period |
Becomes a true grant if you stay the required period |
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Matching Program |
Varies — some matched funds may revert if not used |
Limited city programs — check locally |
Stay in home, often first-time buyer required |
Rarer in Colorado; check city programs annually |
The most common Colorado DPA structure is the deferred 0% second mortgage — specifically CHFA's DPA offering. You receive 3%–4% of the first mortgage loan amount as a second mortgage. No monthly payments. No interest. The balance is due when you sell the home, refinance, or pay off the first mortgage. It comes from your equity at that time — if your home has appreciated, the DPA repayment is a fraction of your total gain.
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CHFA's DPA is not free money — it's an interest-free, no-payment loan that's repaid from your equity at exit. In a market that appreciates, you're repaying a small fraction of your gain. This structure costs you nothing while you own. The repayment at sale comes from growth, not from your pocket. |
The amount of DPA available depends on which program you use and your loan amount. Colorado's programs cover a range from a few thousand dollars to $15,000+ in specific circumstances.
CHFA's DPA is calculated as a percentage of your first mortgage loan amount — not the purchase price. This distinction matters: if you're putting money down, DPA is calculated on the loan balance, not the home price.
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Example: Purchase price: $400,000. FHA down payment (3.5%): $14,000. First mortgage loan amount: $386,000. CHFA DPA at 4%: $15,440. This covers the $14,000 down payment with $1,440 to spare toward closing costs. The buyer still needs closing costs (~$12,000) and reserves (~$7,800) — but the down payment cash requirement goes to zero. |
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Program |
DPA Amount |
Min Credit |
Service Area |
Structure |
Key Note |
|---|---|---|---|---|---|
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CHFA FirstStep + DPA |
3%–4% of loan |
620+ |
All Colorado |
Deferred 0% second mortgage |
FHA-paired; statewide; most accessible |
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CHFA SmartStep + DPA |
3%–4% of loan |
620+ |
All Colorado |
Deferred 0% second mortgage |
Conventional; lower monthly cost than FHA for some buyers |
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CHFA HomeAccess + DPA |
4% of loan |
620+ |
All Colorado |
Deferred 0% second mortgage |
No first-time buyer requirement; disability/caretaker buyers |
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CHFA FirstGeneration |
3%–4%+ (extra layer) |
620+ |
All Colorado |
Deferred 0% second mortgage |
First-gen buyers get additional DPA on top of standard CHFA |
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MetroDPA |
Check metrodpa.org |
600+ |
Denver MSA |
Check current terms |
Denver metro; may differ from CHFA structure |
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CHAC Assistance |
Varies |
Flexible |
Front Range |
Varies |
Lower-income buyers; contact CHAC for current terms |
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NeighborhoodLIFT (when active) |
Up to $15,000 |
620+ |
Adams, Arapahoe, Denver, Douglas, Jefferson |
Forgivable over 5 yrs |
Wells Fargo-funded; monitor for activation rounds |
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Denver HOST Program |
Varies annually |
Case-by-case |
Denver city limits |
Grant or forgivable loan |
Contact denvergov.org/HOST; funds limited annually |
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Aurora CDBG |
Varies |
620+ |
Aurora city limits |
Forgivable loan |
Contact City of Aurora; confirm current availability |
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Commerce City |
Varies |
620+ |
Commerce City |
Varies |
Contact city housing division; confirm availability |
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Employer-Assisted Housing |
Employer-set amounts |
Varies |
By employer/area |
Grant or loan; employer-set |
University of Colorado, major hospitals, large employers |
Program details verified at chfainfo.com, metrodpa.org, chac.org, and neighborworks.org. Always verify current program details directly with the administering agency.
Every DPA program ties its income eligibility to the Area Median Income (AMI) — a number set annually by HUD for each metropolitan statistical area and county in the United States. Understanding what AMI means for your specific area is essential for accurate eligibility planning.
HUD calculates the median household income for each geographic area and uses it as an anchor for affordability programs. A program that limits eligibility to 'households at 80% AMI' means: your household income must be at or below 80% of the median income for your area.
AMI is set by household size — a family of 4 has a higher AMI limit than a household of 1 or 2. This matters significantly for families. A household of 4 earning $100,000 in Denver may qualify where a household of 2 earning $100,000 may not.
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Area / MSA |
Area Median Income (4-person HH) |
80% AMI (typical DPA limit) |
90% AMI |
120% AMI |
|---|---|---|---|---|
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Denver-Aurora-Lakewood MSA |
~$120,000 |
~$96,000 (80%) |
~$108,000 (90%) |
~$144,000 (120%) |
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Boulder MSA |
~$130,000 |
~$104,000 (80%) |
~$117,000 (90%) |
~$156,000 (120%) |
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Greeley / Weld County |
~$95,000 |
~$76,000 (80%) |
~$85,500 (90%) |
~$114,000 (120%) |
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Fort Collins-Loveland MSA |
~$98,000 |
~$78,400 (80%) |
~$88,200 (90%) |
~$117,600 (120%) |
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Colorado Springs MSA |
~$90,000 |
~$72,000 (80%) |
~$81,000 (90%) |
~$108,000 (120%) |
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Pueblo MSA |
~$72,000 |
~$57,600 (80%) |
~$64,800 (90%) |
~$86,400 (120%) |
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Grand Junction MSA |
~$82,000 |
~$65,600 (80%) |
~$73,800 (90%) |
~$98,400 (120%) |
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Rural Colorado (avg.) |
~$70,000–$85,000 |
~$56,000–$68,000 (80%) |
~$63,000–$76,500 (90%) |
~$84,000–$102,000 (120%) |
AMI figures are directional estimates for planning purposes based on HUD's Area Median Income calculations and CHFA program guidelines. HUD updates AMI annually in April. Always verify current income limits for your specific county and household size at chfainfo.com or through a CHFA-approved lender.
DPA eligibility is more nuanced than a single checklist. Every requirement below has specific definitions, exceptions, and practical implications for Colorado buyers.
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Requirement |
What It Is |
Key Detail |
Action Step |
|---|---|---|---|
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Credit Score |
CHFA: 620 minimum (firm)MetroDPA: 600+ (verify)Seller financing: none required |
Your middle score among three bureaus is used. 619 does not qualify for CHFA. |
If below 620: focus on utilization reduction and dispute errors. Rapid rescoring available. |
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Household Income |
Must be at or below program limit (usually 80%–120% AMI by county). All household members' income counted. |
Income includes all adults who will live in the home — not just borrowers on the loan. |
Income limits are set by HUD for each metro area. See AMI table in this guide. |
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Purchase Price |
Property must be at or below program limit (varies by county, usually $450K–$680K+ for Denver metro). |
The limit applies to the purchase price, not your loan amount. Verify exact limit for your county. |
CHFA limits are updated annually. Verify current limits at chfainfo.com before making offers. |
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Property Type |
Primary residence only. Most single-family, condos (FHA-approved for FHA programs), townhomes, and 2–4 unit properties (if owner-occupied) eligible. |
Cannot be used for investment properties, vacation homes, or non-primary residences. |
For condos: verify FHA approval status of the building before making an offer. |
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First-Time Buyer Requirement |
Most programs require not owning a home in the past 3 years. Some exceptions: HomeAccess, veteran programs, targeted census tracts. |
'Three years since last ownership' — not 'never owned.' Divorced, relocated, or previously renting may qualify. |
Verify your specific situation with a CHFA-approved lender. Some cases require documentation. |
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Homebuyer Education |
All CHFA programs require a HUD-approved homebuyer education course before closing. |
Course takes 6–8 hours; can be completed online. Certificate valid for one year. |
Complete this early — cannot close without it. eHome America and Framework are CHFA-accepted. |
The most important financial question for DPA-eligible buyers: what does it actually cost to close on a Colorado home with vs. without DPA? The table below shows the total out-of-pocket requirement for two price points — with and without DPA — and with the seller concession combination.
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Scenario |
Purchase Price |
Down Payment |
Closing Costs |
Reserves |
Total Cash Needed |
|---|---|---|---|---|---|
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FHA only — no DPA |
$400,000 |
$14,000 (3.5%) |
~$12,000 |
~$7,800 |
~$33,800 |
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FHA + CHFA DPA (4%) |
$400,000 |
$0 (DPA covers $15,440) |
~$12,000 |
~$7,800 |
~$19,800 |
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FHA + DPA + seller concessions (3%) |
$400,000 |
$0 (DPA covers down pmt) |
~$0 (seller pays) |
~$7,800 |
~$7,800 |
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FHA only — no DPA |
$500,000 |
$17,500 (3.5%) |
~$15,000 |
~$9,500 |
~$42,000 |
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FHA + CHFA DPA (4%) |
$500,000 |
$0 (DPA covers $19,200) |
~$15,000 |
~$9,500 |
~$24,500 |
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FHA + DPA + seller concessions (3%) |
$500,000 |
$0 |
~$0 (seller pays) |
~$9,500 |
~$9,500 |
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The green rows reveal the strategy: DPA eliminates the down payment. Seller concessions (negotiated into the purchase offer) can cover closing costs. The remaining requirement — reserves only — is $7,800–$9,500. This is the 'minimum viable closing' strategy available to DPA-eligible buyers who also successfully negotiate seller contributions. |
If your parents or legal guardians never owned property in the United States, CHFA's FirstGeneration program provides additional DPA layered on top of standard CHFA DPA. This is the most generous DPA structure available in Colorado for eligible buyers and is dramatically underutilized because many buyers don't know they qualify.
DPA covers the down payment. Closing costs (2%–5% of purchase price) remain your responsibility — unless you negotiate for the seller to cover them. On a conventional loan with less than 10% down, sellers can contribute up to 3% of the purchase price toward your closing costs. On an FHA loan, up to 6%. Requesting this in your offer is standard practice and, in a motivated-seller market, often agreed to.
Gift funds from family members can cover closing costs when DPA covers the down payment. On FHA loans, 100% of both the down payment and closing costs can come from documented gifts. The gift must be documented in writing from the donor as a true gift (not a loan). Combining DPA + gift funds + seller concessions can get the buyer's cash requirement to near zero in favorable scenarios.
Wells Fargo's NeighborhoodLIFT program provides $15,000 — forgivable over 5 years — in eligible Colorado counties. It is not always active, but when rounds open they exhaust quickly. Create a NeighborWorks America alert and ensure you are pre-approved and ready to move when a round opens. $15,000 in forgivable DPA on top of CHFA DPA is a transformative combination.
Some Colorado employers — particularly large university systems, healthcare networks, and major corporations — offer employer-assisted housing (EAH) programs that provide grants or forgivable loans toward a home purchase. These programs are not widely advertised. Ask your HR department specifically about homeownership assistance. University of Colorado Health, UCHealth, UCB, and other large Front Range employers have offered these programs at various times.
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Also from Gravvity: Colorado First-Time Homebuyer Programs Guide | How Much Money Do You Need to Buy in Colorado? | What Credit Score Do I Need in Colorado? |
DPA programs have eligibility requirements that exclude some buyers. The most common reasons a buyer cannot access DPA:
Buyers who don't qualify for DPA — typically due to credit below 620 or seller-financing interest — have alternative paths through Gravvity's creative finance network. Seller financing bypasses credit scoring and bank underwriting entirely. See Gravvity's full seller financing guide for buyers below the 620 DPA threshold.
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FIND OUT IF YOU QUALIFY FOR COLORADO DPA — FREE IN 5 MINUTESGr |
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Gravvity's free assessment maps your credit score, income, and purchase target to the specific DPA programs available for your situation — including programs most buyers never find. Start at Gravvity.com/get-started — five questions, immediate result, no cost. |
Direct answers to the most common Colorado DPA questions.
Is down payment assistance taxable income?
Generally no — DPA received as a deferred loan or forgivable loan is not typically treated as taxable income because it is structured as a loan obligation, not income. However, tax treatment can vary based on the specific program structure, your individual tax situation, and changes in tax law. The IRS publication on home purchase assistance and your personal tax advisor are the appropriate resources. Gravvity does not provide tax advice.
Does DPA affect my monthly mortgage payment?
The CHFA DPA second mortgage has no monthly payment — it is deferred. Your monthly housing payment is determined only by your first mortgage (principal, interest, taxes, insurance, and HOA if applicable). The DPA second mortgage creates no additional monthly obligation. When you eventually sell or refinance, the principal is repaid at that time from proceeds.
Can I refinance if I have a CHFA DPA second mortgage?
Yes — you can refinance a home purchased with CHFA DPA. When you refinance, the DPA second mortgage comes due unless the new lender is CHFA-approved and willing to subordinate or refinance the second mortgage as well. This means you may repay the DPA balance at refinance, or work with a CHFA-approved lender to restructure. Verify your specific situation with a CHFA-approved lender before proceeding with any refinance.
Does DPA make me more or less competitive as a buyer?
DPA does not directly affect your competitiveness to sellers — it is invisible in your offer. To a seller, a DPA-backed FHA offer looks like any other FHA offer. What can affect competitiveness is your loan type: FHA offers are sometimes viewed less favorably than conventional offers in competitive markets, because FHA has property condition requirements that conventional loans don't. This is not a DPA issue — it is a loan type issue. In lower-competition markets, DPA-backed offers are fully competitive.
Can I use DPA for a manufactured home or mobile home?
CHFA DPA programs require the home to be a conventional (site-built) property, condo, or eligible townhome. Manufactured homes on permanent foundations may qualify under some programs — verify with a CHFA-approved lender. Mobile homes that are not on permanent foundations are generally not eligible for DPA or FHA financing.
What if I move out of my DPA-purchased home without selling?
If you move out without selling — for example, to rent the home while living elsewhere — your DPA may become due depending on program terms. Most DPA programs require the home to be your primary residence. Converting to a rental may trigger repayment. Check your specific program agreement before making any occupancy changes. Contact your loan servicer to understand your obligations before you move out.
Can a non-U.S. citizen use Colorado DPA programs?
Citizenship requirements for DPA programs follow the guidelines of the underlying loan type. FHA loans are available to lawful permanent residents and some non-permanent residents with valid social security numbers and work authorization. The first mortgage type's citizenship standards apply to the DPA as well. If you are a non-citizen with questions about eligibility, contact a HUD-approved housing counselor who can evaluate your specific documentation and status.
How long does it take to receive DPA at closing?
DPA funds are not received by the buyer — they are wired directly to the title company at closing by the DPA provider. The buyer doesn't handle DPA funds at any point. From the buyer's perspective, DPA appears as a line item in the closing disclosure showing the second mortgage funds applied toward the down payment. The timeline for DPA processing runs parallel to the mortgage process — typically 30–45 days from accepted offer to closing.
What is the difference between a DPA grant and a DPA loan?
A DPA grant is money you receive and never repay — it is not a loan and creates no future financial obligation. True grants are rarer in Colorado than in some other states. A DPA loan (deferred or forgivable) must be repaid under certain conditions. CHFA's DPA is a deferred loan (repaid at sale or refinance). NeighborhoodLIFT is a forgivable loan (forgiven over 5 years). The practical difference for most buyers is minimal in the short term — neither requires monthly payments — but at the time of sale, a deferred loan reduces your net proceeds while a true grant does not.
My income is just over the limit. Is there any way to qualify?
Possibly — there are a few avenues. First, income is calculated based on all anticipated household members, not all borrowers. If income can be documented to exclude a temporary or variable component, a lender may be able to recalculate below the limit. Second, some programs use different income calculation methods (gross vs. net, commission averaging) that may yield different results. Third, targeted census tracts may have higher income limits or no income limits for certain programs. Discuss your specific situation with a CHFA-approved lender and a HUD-approved housing counselor.
Does CHFA DPA work with a 15-year mortgage instead of 30-year?
CHFA programs are primarily paired with 30-year fixed-rate mortgages. Shorter-term mortgages are not typically eligible for CHFA DPA. If you want a shorter term, you could use a 30-year CHFA loan and make extra principal payments after closing — this achieves the payoff timeline of a shorter term without restricting DPA eligibility.
What happens to my DPA if the seller backs out before closing?
If a contract falls through before closing, DPA funds are never disbursed — they exist only as a commitment during the application process. There is no financial exposure from a DPA commitment that doesn't fund. Your earnest money (if at risk based on contingency status) is a separate consideration. DPA commitments typically expire after a period — if you need to restart the search after a failed contract, you may need to reapply through your CHFA-approved lender.
All program data sourced from official administering agency websites. Income limits, DPA amounts, and eligibility requirements change annually — verify current details before acting.
1. Colorado Housing Finance Authority (CHFA) — Homeownership Programs
2. CHFA — FirstGeneration Down Payment Assistance
3. CHFA — Participating Lender Directory
4. MetroDPA — Metro Mortgage Assistance Plus
5. Colorado Housing Assistance Corporation (CHAC)
6. NeighborWorks America — LIFT Programs
7. HUD — Area Median Income (AMI) Data by Area
8. Consumer Financial Protection Bureau — Down Payment Assistance
9. Consumer Financial Protection Bureau — Owning a Home
10. HUD — Find a HUD-Approved Housing Counselor
11. Denver Department of Housing Stability (HOST)
12. Colorado Division of Housing — DOLA
13. National Council of State Housing Agencies
14. Redfin — Colorado Housing Market Data
15. Annual Credit Report — Free Federal Reports
Disclosure: This guide is provided by Gravvity for educational purposes only and does not constitute legal, financial, or mortgage advice. DPA program eligibility, income limits, amounts, and availability change annually and may change mid-year. Always verify current program details with CHFA, MetroDPA, CHAC, or the administering agency before making any purchase or financing decision.