Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance

Unlock Your First Home With the Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance

Dreaming of a Colorado front porch but worried about that five-figure down payment? The Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance program may be the key you’ve been searching for. Offering up to $10,000 in help, CHAC bridges the gap between what you’ve saved and what lenders require—often the single biggest hurdle for first-time buyers. Below, you’ll find a practical road map, insider tips, and answers to the questions Coloradans are asking right now about this little-known financial lifesaver.

Why Down Payment Help Matters in Colorado’s Red-Hot Market

Median home prices across the Centennial State topped $580,000 in late 2023, according to multiple listing service data—up nearly 40 % in just five years. At that price, even a bare-bones 3 % down payment weighs in at $17,400. Renters juggling student loans or child-care bills often hit a wall long before they reach that figure. A modest $10,000 boost from the CHAC program can lower a buyer’s required cash by more than half, turn a 12-month savings sprint into a 4-month jog, and help borrowers qualify for better mortgage terms.

Think of the program as a friendly Sherpa guiding you up a steep financial mountain; it doesn’t carry you the entire way, but it lifts enough weight to make the summit possible.

How does Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance work?

The CHAC assistance arrives as a second mortgage—technically a subordinate lien—for up to $10,000. The loan rides behind your primary mortgage, often with a low fixed rate (typically 0–5 %) and a repayment schedule stretching 30 years. There is no balloon payment, and you can pay it off early without penalty. Funds can be used for both the down payment and reasonable closing costs, making the product doubly valuable in metro areas where title fees and transfer taxes stack up quickly.

Because it’s a second mortgage, lenders often count the monthly CHAC payment when assessing your debt-to-income ratio. Still, the trade-off usually pencils out: a smaller first mortgage can push your overall monthly cost down even after accounting for CHAC’s modest installment.

Who qualifies for Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance?

Eligibility rules are straightforward, but skipping one line item can derail an otherwise perfect application. Here’s what matters most:

• First-time buyer status: No ownership interest in a primary residence within the past three years.
• Income caps: Vary by county and household size. As a rule of thumb, total household income must sit below 80 % of the Area Median Income (AMI).
• Minimum investment: You contribute at least $1,000 of your own funds.
• Home-buyer education: Complete HUD-approved counseling, online or in person, before closing.
• Property limits: Purchase price cannot exceed local FHA loan limits.

A quick call to CHAC or an approved lender will confirm exact figures for your zip code—Denver County numbers differ from those in La Plata or Otero.

Step-by-Step: Securing Your CHAC Loan

1. Pre-qualify with a primary lender. Choose a bank or credit union experienced with layered financing.
2. Register for counseling. The four-hour class costs about $75 and delivers a certificate good for one year.
3. Submit the CHAC packet. Paperwork includes pay stubs, W-2s, tax returns, and a signed purchase contract.
4. Underwriting review. CHAC analyzes your debt ratios and cash reserves, then issues a conditional commitment.
5. Close both loans together. Title companies disburse CHAC funds right alongside your primary mortgage.
6. Move in, then repay. Budget for the small second-mortgage payment—often under $60 per month on a 0 % loan.

Real Numbers: What $10,000 Can Mean for You

During the pandemic, 26-year-old ICU nurse Mariela saved diligently but still came up $8,400 short for a starter condo in Aurora. She paired an FHA loan with the Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance. Monthly costs dropped by $93 because her first mortgage shrank, and she avoided pricey private mortgage insurance. Three years later, appreciation boosted her equity by nearly $50,000—a 6× return on that original $8,400 mismatch. Her story illustrates the program’s quiet power: it doesn’t just help you buy—it accelerates wealth-building once you’re in the door.

Pros, Cons, and Pro Tips

Advantages

• Low interest or even 0 %.
• No early payoff penalty.
• Can be layered with city grants like Denver Metro DPA.
• Boosts negotiating strength—sellers favor solid financing.

Potential Drawbacks

• Income limits exclude higher-earning households.
• Extra underwriting step can add 1–2 weeks to closing.
• Second-lien payment counts toward debt-to-income (DTI).

Pro Tips

• Start counseling early; certificates are valid for 12 months.
• Ask your lender to run automated underwriting with and without CHAC funds to see which scenario yields better terms.
• If your DTI is borderline, look for seller-paid rate buydowns to offset the second-mortgage payment.

Comparing CHAC With Other Colorado First-Time Buyer Programs

Colorado offers a menu of assistance tools, but each has distinct seasoning. Here’s a quick taste test:

• CHAC program: $10k maximum, statewide, second mortgage, strict AMI limits.
• CHFA SmartStep Plus: Up to 4 % of loan as a forgivable second; higher interest rate on the first mortgage offsets the grant.
• Denver Metro DPA: 3–5 % grant forgivable after three years; city-specific funding cycles can dry up mid-year.
• Boulder Shared Appreciation: No monthly payment but the county recaptures a percentage of appreciation on resale.

For buyers prioritizing predictability and low carrying costs, the Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance shines—even if the dollar amount is capped at $10,000.

FAQ About CHAC and First-Time Buying in Colorado

Your Next Move: Turn Knowledge Into Keys

Prices may feel intimidating, but assistance programs soften the blow. Whether you’re eyeing a Craftsman bungalow in Pueblo or a sleek condo in RiNo, the Colorado Housing Assistance Corporation (CHAC) Down Payment Assistance can tilt the odds in your favor. Ready to explore homes that fit both your budget and your lifestyle? Connect with our local-market specialists today for a free strategy session and personalized lender introductions.