Owning a home isn’t just about having a place to live. It is about establishing roots, creating financing stability and building a better future for our families. Homeownership can be the catalyst for ordinary people to create extraordinary wealth. For many hardworking people, the dream of homeownership may feel out of reach, specifically when it comes to saving money for a down payment. One of the biggest hurdles of buying a home is ensuring adequate funds for down payment and for closing costs. In Colorado, we have several down payment assistance programs that can help make homeownership a real possibility. Two incredible resources available to Colorado homebuyers are the Colorado Housing and Finance Authority (CHFA) and Metro Down Payment Assistance (MetroDPA) programs. CHFA provides eligible homebuyers with financial assistance to help with the down payment and closing costs.
1. The CHFA Down Payment Assistance Grant:
- No repayment required. This grant means that you do not have to pay it back.
- CHFA provides up to 3% of your first mortgage loan amount in the form of a grant.
- This grant is available to qualifying buyers using the CHFA first mortgage loan and can help reduce or eliminate the cash you need to close on your new home.
2. CHFA Second Mortgage Loan
- Offers up to 4% of your first mortgage amount as a 0% interest second mortgage loan with a deferred payment.
- You don’t make payments on the second mortgage until you sell, refinance or pay off your mortgage.
- MetroDPA is another program that helps with down payment and closing cost assistance for buyers in many Colorado communities.
- Offers up to 5% of your first mortgage amount, depending on loan type
- 0% interest second mortgage loan with a deferred payment
- You don’t make payments on the second mortgage until you sell, refinance or pay off your mortgage
While renting may fulfill your short term needs, it doesn’t accomplish the same long term benefits of homeownership. When you own your home, your mortgage payment is an investment in your future. Consider an average home price appreciation of 5% annually. A $400,000 home purchased today could be worth $20,000 more in just one year. That same home could be worth over $510,000 after five years. Imagine the compounding effect long term; the home could be worth over $651,000 after 10 years of homeownership. Waiting for interest rates to come down or waiting because you’re saving for a larger down payment is not the best strategy. There is no better time than now to start your journey toward creating generational wealth through homeownership. These programs can significantly lower the upfront cost of buying a home, which can turn your dreams into a reality.
