Mortgage

Colorado First Time Dwelling Patrons: 2021 Packages & Grants Grant

What You Should Know About Buying a Home in Colorado

Buying your first home is exciting – but it can also be a little intimidating.

The good news is that first time home buyers in Colorado have access to a ton of support to help them with the home buying process.

This ranges from homebuyer advice and training programs to cash in the form of loans or grants that could cover your up-front costs. Explore your options to see what you qualify for.

Confirm authorization to buy a house in CO (June 15, 2021)

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Colorado Home Buyer Summary Colorado

According to the Colorado Association of REALTORS, the average home price in the state was over $ 500,000 in April 2021. This meant a price gain of 19.5% year-on-year.

At $ 502,000, Centennial State prices are about 1.5 times higher than the national average. So it's good that there's a lot of support for a first-time home buyer in Colorado.

Colorado Home Buyer Summary

Average home sale price
$ 502,000

Minimum deposit in Colorado (3%)
$ 15,060

20% deposit in Colorado
$ 100,400

Average Colorado Credit Score 1
725

Maximum Grant for Home Buyers in Colorado2
5% of the loan amount only in El Paso County / 3% nationwide

Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a conventional mortgage with a minimum credit rating of 620.

If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not need a down payment at all.

Confirm authorization to buy a house in CO (June 15, 2021)

First-time loan programs for Colorado homebuyers

If you're a first-time buyer in Colorado on a 20% down payment, you can get a conventional loan – likely with a low interest rate and no personal mortgage insurance (PMI).

If you cut 20%, you will keep your monthly mortgage payments low. It could also give you an advantage in competitive housing markets like Denver or Boulder.

However, few first-time borrowers have saved that much.

The good news is that there are a wide range of mortgage loan options that can help buyers get into a new home with little or no down payment:

Conventional 97 – Supported by Freddie Mac or Fannie Mae. 3% down payment and at least 620 credits. You can usually stop paying mortgage insurance after a few yearsFHA loans – Supported by the Federal Housing Administration. 3.5% down and a credit score of at least 580. You keep looking for mortgage insurance until you refinance, move to another type of mortgage, or pay off your loanVA loan – For veterans and service members only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available, so check your eligibility if you have a history of military serviceUSDA loan – For low to middle income people who shop in designated rural areas. A zero deposit is required. The creditworthiness requirements vary depending on the lender, but often 640. Low mortgage insurance ratesCHAC and CFHA mortgage loans – Supported mortgage programs offered nationwide and locally. More info below

Remember, your down payment isn't the only upfront cost when buying a home. You will also need to cover the closing costs, which are often 2-5% of the home loan amount.

Down payment and exit grant programs – as detailed below – can help first-time buyers cover their up-front fees.

Also, remember that your mortgage payments include property taxes and home insurance in addition to the loan amount and interest. So take these home costs into account when assessing your budget for buying a home.

Support programs for first-time home buyers in Colorado

There are a variety of state and local programs designed to help first time home buyers in Colorado make an affordable home purchase.

CHFA

The Colorado Housing and Finance Authority (CHFA) ​​operates nationwide, providing education and down payment assistance.

The CHFA firststep and firststep plus programs are open to anyone who wants FHA loans (Federal Housing Administration-supported mortgages) with fixed interest rates and 30-year terms.

Typically you will need a credit score of 620, although you may find a CHFA approved lender that accepts 580. You must also have a low or middle income for your area.

CHAC

Colorado Housing Assistance Corporation (CHAC) is another official state-wide facility providing all kinds of advice, education, and support to every first-time buyer in Colorado.

In addition to support with the down payment, CHAC offers training and advice.

The courses come in two flavors: eHomeAmerica ($ 99 for the first borrower and $ 49 for each co-borrower) and Framework ($ 75). Both are currently available online and most of the items have versions in Spanish.

To qualify for CHAC assistance, you must have a household income no greater than 80% of the median income (AMI) of the area in which you intend to buy. At Arvada, however, this can be 100% or 115%.

You can call (303) 572-9445 or toll free (866) 377-7835 to see if you are eligible.

CRHDC

In addition to CHAC, you may also be able to receive assistance from the Community Resources and Housing Development Corporation (CRHDC) NeighborhoodLIFT program. This is available to buyers in Adams, Arapahoe, Denver, Douglas, and Jefferson Counties.

NeighborhoodLIFT offers homebuyer education programs as well as priority assistance for first responders, military personnel, and teachers. Income caps are less restrictive for those who qualify.

Check eligibility to buy a home for the first time (June 15, 2021)

Grants for First Time Home Buyers in Colorado

Down Payment Assistance Programs (DPA) can provide grants and loans to help buyers meet their expenses. This includes the down payment and the closing costs.

These programs are often designed to help low-income homebuyers, and many have income caps based on household size.

DPA programs and eligibility requirements vary by territory. Therefore, check with your mortgage lender or real estate agent to see what is available locally.

CHFA

CHFA can grant down payment grants (which never have to be repaid) as well as loans. You can get 3% of your mortgage amount as a grant.

For example, if you borrow $ 400,000, you might get up to $ 12,000 towards your down payment and / or prepayments.

If that's not enough, you can increase that up to 4% of your mortgage amount. However, this does not come in the form of a grant, but in the form of a second mortgage loan.

You would have to repay this loan in full when you sell, refinance, or finalize it pay off your first mortgage. Other measures can also trigger a full repayment. Even so, you don't have to make any monthly payments in the meantime.

CHAC

CHAC does not seem to offer grants, only loans. And it doesn't specify the maximum amount it will borrow to home buyers, nor the interest rate it charges. But on his website it says:

“The loan is booked as a second mortgage (lien) on the property purchased. All loans must be repaid, usually with monthly payments, although the start of these payments may vary. "

It adds, “All borrowers are required to make a minimum contribution of $ 1,000 (minimum disability program contribution is $ 750.00) to the transaction, which cannot be a gift. Exceptions are possible. "

Neighborhood LIFT

The NeighborhoodLIFT program can provide a down payment of $ 15,000 for qualifying properties. Remember, this is only available in Adams, Arapahoe, Denver, Douglas, or Jefferson Counties.

You can download PDFs with income limits and a map showing the areas covered. The eligible real estate includes a single-family house, a town house, a condominium, a plot of land with 1-4 units or a planned residential unit (PUD).

CHFA, CHAC, and NeighborhoodLIFT all require applicants to take a homebuyer course. But most first-time home buyers in Colorado or elsewhere should appreciate all the knowledge they can learn.

Check eligibility to buy a home for the first time (June 15, 2021)

Buy a home in Colorado's major cities

Buying a home in or near one of Colorado's major cities can be a little trickier than buying in the suburbs or the countryside. So you want to know what to expect.

Denver first time home buyers

The average list price in Denver was $ 525,000 as of May 2021, according to Realtor.com. That was 9.6% more than a year earlier.

If you want to buy a home at this price, your down payment can be between:

$ 15,750 against 3% deposit$ 105,000 against 20% deposit 20%

The Denver Department of Housing Stability (HOST) offers a deposit of up to $ 15,000. This appears to be part of the CHAC program as interested parties are referred to it.

However, the website has Denver-specific household income caps: “The program is limited to households earning up to 80 percent of the median income of the area (up to $ 52,000 for a one-person household or up to $ 66,850 for a three-person household). Household)."

Note that availability and income caps may have been updated by the time you read this.

First time home buyer in Colorado Springs

The average list price in Colorado Springs was $ 390,000 as of May 2021, according to Realtor.com. This corresponds to an increase of 12.7% compared to the previous year.

If you're looking to buy a $ 390,000 home, your down payment options can be:

$ 11,700 against 3% deposit$ 78,000 against 20% deposit 20%

Those buying in Colorado Springs may be eligible for El Paso County's Turnkey Plus mortgage program. This offers "soft loans" with an interest rate of 0% and no monthly payments. And you can borrow 4% or 5% of the value of your new mortgage.

Half of your DPA loan will be waived in the first five years of your mortgage. However, the other half will remain repayable for the full 30 years and will not be granted until the final payment of your mortgage.

In the meantime, if you sell, refinance, or trigger other conditions, you will need to repay your loan balance in full at that point.

Aurora first-time home buyers

According to Realtor.com, the average list price in Aurora as of May 2021 was $ 410,000. This corresponds to an increase of 10.8% compared to the previous year.

If you're looking to buy a $ 410,000 home, your down payment options are between:

$ 12,300 against 3% deposit$ 82,000 against 20% deposit 20%

Aurora's Home Ownership Assistance Program (HOAP) offers loans of up to $ 10,000 or the minimum down payment required on your mortgage, whichever is lower. And you have to deposit at least 1% of the purchase price of the house from your own funds.

This is another "silent" loan; H. You don't make monthly payments or pay interest. However, none of this is forgivable. And you'll have to repay the entire amount if you sell the house, if it is no longer your primary residence, or if you refinance with cash.

Where to Find Home Buying Help in Colorado

All of the organizations listed above should provide free advice to any first time Colorado home buyer.

In addition to our selections, the US Department of Housing and Urban Development (HUD) has a list of city- and county-specific programs across Colorado, which you can view here.

What are the current mortgage rates in Colorado?

Here you can see the current mortgage rates in Colorado.

When you're ready to buy, make sure you get interest rate quotes from at least 3 mortgage lenders. This ensures that you are getting the lowest interest rate and fees available to you.

If you choose to work with any of the Colorado first-time buyer programs listed above, you will be provided with a list of participating lenders to choose from. However, you can still search any list to find your best mortgage rate.

If you go the traditional route – with no down payment assistance – you can check rates from any mainstream lender.

The search for your best mortgage loan can save you thousands.

Confirm your new price (June 15, 2021)

1 Source: Experian.com 2021 study on 2020 data

2Based on a review of available state DPA grants at the time of this writing

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