CHFA SmartStep Plus First-Time Homebuyer Assistance Programs

CHFA SmartStep Plus: The Colorado First-Time Homebuyer Program That Cuts Your Up-Front Costs

Dreaming of a Rocky Mountain address but worried about the cash you’ll need on closing day? The CHFA SmartStep Plus mortgage program could be your fast track to the front porch. Rolled out by the Colorado Housing and Finance Authority (CHFA), this loan option pairs a low down payment with built-in assistance so first-time buyers can break into the market sooner—and with less stress on the savings account.

How Does the CHFA SmartStep Plus Program Work?

At its core, SmartStep Plus is a 30-year, fixed-rate mortgage layered with a second loan that covers a portion of your down payment and closing costs. The assistance—often called the plus portion—usually equals up to 4% of the first mortgage amount. For a $400,000 home, that’s as much as $16,000 in instant support. Repayment is deferred until you sell, refinance, or pay off the first mortgage, meaning no monthly bill sneaking into your budget.

• Primary Mortgage: 30-year fixed, conventional or government-backed (FHA, VA, USDA).
• Down Payment Assistance (DPA): 3% or 4% of the loan amount, 0% interest, no monthly payment.
• Credit Score: Minimum 620 for most borrowers; 680+ unlocks better pricing.
• Income Cap: Set at 80% of the area median income (AMI) in most counties.

In plain English, you borrow once for the house and a second time for the up-front costs, but you don’t feel the pinch of that second note until you move on. It’s a practical solution for buyers with solid income but limited liquid savings.

What Are the Main Benefits of CHFA SmartStep Plus?

The Colorado SmartStep loan offers three advantages that stand out in the crowded world of first-time buyer incentives:

1. Lower Up-Front Cash. The average first-timer in Denver put down 13% last year, according to Realtor® data. SmartStep Plus borrowers can dip as low as 3%—or even 0% on VA/USDA options.
2. Predictability. A fixed-rate mortgage keeps monthly payments stable even when the Fed hikes rates.
3. Built-In Homebuyer Education. CHFA’s online class costs about as much as a streaming subscription and arms you with budgeting skills many private lenders skip.

Add those up and you have a program designed to shift buyers from “someday” to “offer accepted” without compromising long-term affordability.

A Real-World Win: Maria & Alex’s Story

Take Maria, a public-school speech therapist, and her partner Alex, a mechanic in Pueblo. They earned just under the county’s $95,000 income cap but had only $8,000 saved after student loans and a wedding. With CHFA SmartStep Plus, they snagged 4% assistance—roughly $14,600 on their $365,000 starter home—leaving them enough cash for new appliances and one epic house-warming barbecue. Twelve months in, they’re on track to overpay $50 each month toward principal, shaving almost three years off their mortgage term.

Who Is Eligible for CHFA SmartStep Plus in Colorado?

Eligibility isn’t a mystery, but there are a few boxes to tick. CHFA defines a first-time homebuyer as anyone who hasn’t owned a principal residence in the past three years. You’ll also need the following:

• Credit Profile: A FICO score of 620 or higher—though 640+ generally scores smoother underwriting.
• Debt-to-Income (DTI): 50% max, but many lenders prefer sub-45% to keep payments comfortable.
• Primary Residence Commitment: You must move in within 60 days and live there full-time.
• Homebuyer Education Certificate: Complete CHFA’s approved class before closing.
• Income Limits: County-specific; for example, $126,400 for a family of four in Larimer County vs. $160,200 in Pitkin.

If you’re a qualified veteran or purchasing in a targeted area, the three-year ownership look-back is waived—a detail many applicants overlook and leave money on the table.

Step-by-Step Guide to Securing a SmartStep Plus Mortgage

1. Check Your Credit Report. Fix errors and pay down revolving debt to boost your FICO.
2. Compare CHFA-Approved Lenders. Over 100 banks and credit unions offer the SmartStep Plus mortgage, and rates vary.
3. Get Pre-Qualified. Provide W-2s, bank statements, and ID. Ask for an official estimate that includes the DPA.
4. Finish Homebuyer Education. The class takes about four hours online; schedule it early to avoid a closing delay.
5. Shop for Homes. Focus on properties within your loan limit and budget after HOA dues, insurance, and taxes.
6. Submit Your Loan Package. Your lender sends the file to CHFA for final approval—turnaround averages three business days.
7. Close and Collect Keys. Sign two sets of notes (first and DPA) and celebrate with a Colorado-sized sigh of relief.

SmartStep Plus vs. Other Colorado Homebuyer Programs

For buyers wanting maximum flexibility in property type and a quicker approval timeline, Colorado Housing and Finance Authority SmartStep remains the go-to choice.

A Numbers Nugget Many Miss

According to internal CHFA reporting shared at their 2023 annual symposium, 82% of SmartStep Plus borrowers used less than half of the DPA they qualified for. Translation: many Coloradans could have reduced their out-of-pocket costs further but didn’t maximize the allowance. Sit down with your lender early and map out the full eligible percentage so you don’t leave free capital on the table.

5 Insider Tips to Make Your SmartStep Plus Application Bulletproof

• Document Every Dollar. Large bank deposits trigger sourcing rules; keep a paper trail.
• Avoid New Credit Lines. That furniture-store “0% for 12 months” offer can tank your DTI ratio.
• Budget for Reserves. CHFA may require two months of mortgage payments in savings; build a cushion.
• Pick the Right Closing Date. Closing early in the month trims prepaid interest.
• Ask About MCC. Some lenders bundle a Mortgage Credit Certificate, slicing up to $2,000 off yearly federal taxes.

Frequently Asked Questions

Your Next Step Starts Today

Colorado’s market won’t wait—inventory is still tight, and prices inch upward each quarter. If CHFA SmartStep Plus looks like your springboard to homeownership, our team is ready to guide you from pre-qualification to move-in day. Reach out now for a free eligibility check and personalized rate quote. Let’s turn those mountain-view daydreams into an address you can write on your mail.