Buying a home is everyone’s ultimate goal. However, it can be an emotional and challenging journey. Looking for suitable options while staying within a budget can be difficult. All in all, buying a house, especially for the first time, can be nerve-wracking as you are clueless about everything. Purchasing a good home is extremely difficult in Colorado due to the constantly increasing prices and houses setting quickly.
However, there are many programs for first-time buyers that make this process easy. This article will give you all the details regarding the most popular loan programs in Colorado from which first-time buyers can benefit.
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What are First Time Home Buyers Programs?
CHFA, or Colorado Housing and Finance Authority, provides many programs to assist in giving fixed-rate mortgages and financial support for closing costs and down payments. The CHFA offers the following first-time home buyer programs in colorado.
1. CHFA HomeAccess
CHFA provides a HomeAccess and a HomeAccess plus program to assist and help first-time home buyers in Colorado. This program offers a USDA or FHA loan to first-time home buyers. Of course, there are price as well as income limits. However, if eligibility is proved, you get $25,000 in down payment assistance with your loan.
This program, in particular, is mainly for first-time buyers or a veteran who has a permanent disability or is a custodial parent of a child with a permanent disability. Along with this, other eligibility criteria mentioned above also apply.
2. CHFA SectionEight
The CHFA SectionEight and SectionEight plus provide eligible homebuyers with 30 years of fixed USDA or FHA loans and down payment assistance; however, it comes with a required borrower income limit of $130,200.
Along with the requirements of all CHFA programs, this program is for first-time buyers of veterans who are receiving Section 8 assistance from section 8 agency.
3. CHFA FirstStep
CHFA offers FirstStep and FirstStep Plus programs that allow a 30-year fixed FHA loan. Along with this, this program assists with a down payment as well.
First-time home buyers or veterans buying in a targeted area can get this offer. You must meet the CHFA’s loan requirements as well as your income must be within the limits of the program.
4. CHFA SmartStep
CHFA provides SmartStep as well as SmartStep plus programs. It provides a fixed 30 years VA, USDA, or FHA loan along with down payment assistance. However, the limit of income should be $130,200.
Basic Eligibility Criteria for All CHFA Programs
- The mortgage lender’s loan requirement is fulfilled
- You must have at least a 620 credit score; however, there is room for exceptions.
- You can at least contribute an amount of $1000 to the purchase.
- You must be able to complete a homebuyer class.
- Your income requirement must be met according to the loan program, location of your home, and household size.
- The 50 percent DTI or debt to income ratio must not exceed a FICO of 620 to 659, while a 55 percent DTI with a FICO of 660 or higher.
Working Style/Down Payment Assistance
CHFA provides first-time home buyers down payment assistance in 2 ways. It gives you the option of a second mortgage and a grant. Any one of the options can be chosen in coexistence with the first mortgage.
The CHFA second mortgage provides assistance funds of up to 4 percent of a person’s first mortgage. This assistance does not have to be paid off until someone sells their home or refinances the first mortgage. This option can be combined with all SectionEight, FirstStep, HomeAccess, or SmartStep first mortgages.
With an assistance grant, a person can receive up to 3 percent of their mortgage. The added benefit is that it does not have to be repaid. This option can be combined with the CHFA SectionEight or SmartStep first mortgage program.
If you are buying near the Front Range, the metroDPA program provides 6 percent of the purchase price in the form of a 3-year forgivable second mortgage.
- Must have a credit score of 640.
- Annual income should be less than $150,000.
To get started on the journey of buying your first home, you need to start comparing different first-time home buyer loan programs. You need to start assessing your credit and decide how much you can afford; look for the latest mortgage rates. Lock it immediately once you can see a reasonable rate from a mortgage lender. Get yourself enrolled in the Colorado first-time home buyer education class program that will help you in decision making and boost up your confidence alongside guiding you about everything needed to buy a home for the first time.
What should a first-time buyer avoid?
A first-time buyer should avoid not doing enough research when looking to buy a house and not hesitate to ask questions. Thorough research on housing prices and programs will aid in getting the best possible option.
What should be the first step when looking to buy a house?
When buying a house, firstly, you need to set up a budget and then look at options like a first-time buyer program to get the best possible program within your budget.
How many days before closing do lenders pull your credit?
It depends from lender to lender; however, usually, they pull your credit right before the final approval.
Do lenders check bank statements before closing?
Lenders must check your bank statements once you apply for a loan. They usually begin the underwriting approval process after that and do not review your bank statement again before closing.
We don’t recommend any broker or agency or involvement in this recommendation. We don’t affiliate with any, and we are not taking any commission/benefit from this. Do your own research, and if you take any step, you are the one who is responsible.