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CHFA Down Payment Assistance Second Mortgage Loan

Statewide, Colorado

Last verified
See what you qualify forOfficial program site →
Assistance

4%

Of the purchase price, as the program sets it

Income limit

$174,440

The household income limit the program publishes

Price cap

$806,500

Highest purchase price the program allows

Repayment

Deferred

No payments until the home is sold or refinanced

What is CHFA Down Payment Assistance Second Mortgage Loan?

CHFA Down Payment Assistance Second Mortgage Loan is a deferred second loan for homebuyers in Statewide, Colorado.

  • CHFA's Down Payment Assistance Second Mortgage Loan is a 0% interest, deferred-payment second mortgage equal to up to 4% of the CHFA first mortgage loan amount (capped at $25,000 in practice for most products). No monthly payments are required. The full principal balance is due upon sale, refinance, payoff of the first mortgage, or when the home is no longer the borrower's primary residence; otherwise repayment is deferred to month 361 of the first mortgage. The Second Mortgage option is an alternative to the CHFA Grant — borrowers select one or the other, not both.
  • Up to 4% of the CHFA first mortgage loan amount (capped at $25,000) as a 0% interest, deferred-payment second mortgage. No monthly payments — full balance is due upon sale, refinance, payoff of first mortgage, or when the home ceases to be the primary residence.
  • otherwise deferred to month 361 of the first mortgage.
  • Funding comes from State and Bond.

How much assistance does it provide?

CHFA Down Payment Assistance Second Mortgage Loan provides assistance worth 4% of the purchase price, as set by the program.

  • The program asks buyers to contribute $1,000 minimum borrower cash contribution from own funds.
  • The program can be combined with other assistance, subject to the rules of each.
  • Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

CHFA Down Payment Assistance Second Mortgage Loan is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

  • Repayment is triggered by Full principal balance due at sale, refinance, payoff of first mortgage, or when home is no longer primary residence. Otherwise deferred to month 361 of the first mortgage. No monthly payments and no interest accrual.
  • The assistance is recorded in 2 position.
  • Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

CHFA Down Payment Assistance Second Mortgage Loan is open to buyers who will live in the home as their primary residence.

The program requires

  • The home is occupied as a primary residence
  • On credit: 620 minimum FICO for FHA/VA/USDA; 660 for Conventional
  • A completed homebuyer education course, through CHFA-sponsored homebuyer education (online via eHomeAmerica or Framework, or in-person via CHFA-approved housing counseling agencies)
  • Residency: Property must be located in Colorado and used as borrower's primary residence
  • Citizenship or immigration status: U.S. citizen, permanent resident alien, or qualified non-permanent resident alien per first-mortgage product overlays
  • Must be paired with an eligible CHFA first mortgage (CHFA Preferred, CHFA Preferred Plus, CHFA SmartStep, CHFA SmartStep Plus, CHFA FirstStep, CHFA FirstStep Plus, or CHFA HomeAccess). Borrower must have minimum mid-FICO of 620 (Government/USDA) or 660 (Conventional). Maximum DTI 50%. At least one borrower must complete CHFA homebuyer education. Borrower minimum cash contribution of $1,000 from own funds.

The program excludes

  • Purchases above the $806,500 price cap
  • Households above $174,440

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

CHFA Down Payment Assistance Second Mortgage Loan limits household income to $174,440.

  • The limit applies to total household income, not only the borrower’s.
  • Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

CHFA Down Payment Assistance Second Mortgage Loan caps the purchase price at $806,500.

  • Eligible property types include Single-family detached, Townhome, Condominium (warrantable), 2-4 unit (per first-mortgage overlays), and Manufactured (real property, per product).
  • New construction is eligible.
  • Manufactured homes are eligible.

Where does it apply?

CHFA Down Payment Assistance Second Mortgage Loan serves buyers purchasing in Statewide, Colorado.

  • The program targets specific areas: IRS-designated targeted areas in Colorado allow waiver of first-time-homebuyer requirement (where applicable) and offer higher income/purchase-price limits under the bond program.

How do you apply?

Applications for CHFA Down Payment Assistance Second Mortgage Loan go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

    Required by the program, through CHFA-sponsored homebuyer education (online via eHomeAmerica or Framework, or in-person via CHFA-approved housing counseling agencies).

  2. Contact the administering agency to reserve funds

    Funds are reserved through Lender reservation through CHFA's HomeConnection loan reservation system, and are subject to availability.

  3. Work with a lender who handles the program

    Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.

Learn this program

Short reads on how it works, in plain language. Free, no sign-up needed to read.

Free course from Hey Prescott

CHFA Down Payment Assistance Second Mortgage Loan, explained

A short, free course on CHFA Down Payment Assistance Second Mortgage Loan: what it is, who it is for, when it is repaid, where it applies and how to apply. Based on program data from June 2026. About ten minutes.

5 modules · About 10 minutes

Read the course

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