If you've been researching mortgages in Colorado, you've probably seen CHFA mentioned somewhere. Maybe your agent brought it up, maybe you saw it in a search result, or maybe someone told you to look into it without explaining what it actually is.
CHFA stands for the Colorado Housing and Finance Authority. It's a state agency that helps Colorado residents buy homes by offering below-market mortgage rates combined with money to help cover your down payment and closing costs. Here's a plain-language breakdown of how it works.
What CHFA actually is
CHFA is not a lender in the traditional sense. You don't apply directly to CHFA the way you'd apply to a bank. Instead, CHFA works through a network of approved lenders who originate the loans on CHFA's behalf.
When you get a CHFA loan, the process looks like a normal mortgage application. You work with a CHFA-approved lender, go through underwriting, and close like any other home purchase. The difference is that your lender sells the loan to CHFA after closing, which is what allows them to offer the program's benefits.
CHFA gives Colorado buyers access to a competitive mortgage rate plus up to 3% of the loan amount in down payment and closing cost assistance. On a $500,000 purchase that's up to $15,000 toward your upfront costs.
The two parts of a CHFA loan
Part 1: The first mortgage
CHFA offers a 30-year fixed-rate first mortgage at a rate that is typically competitive with market rates. The rate changes periodically based on CHFA's funding sources. Your CHFA-approved lender can tell you the current rate at any time.
Part 2: The down payment assistance
On top of the first mortgage, CHFA offers assistance of up to 3% of the loan amount for down payment and closing costs. This assistance comes in two forms depending on the program:
- Grant: Money that does not need to be repaid. Some CHFA programs offer the assistance as an outright grant.
- Second mortgage: A low or zero interest second loan that is either deferred or has very low payments. This adds a lien to the property but is structured to be manageable.
Who qualifies for a CHFA loan: the actual requirements
Most buyers who ask me about CHFA assume they won't qualify. Most of them are wrong. Here are the actual requirements:
- Credit score: Minimum 620 for most CHFA programs
- First-time buyer: You have not owned a primary residence in the past three years. Exceptions exist for buyers purchasing in federally designated targeted areas.
- Income limits: Vary by county and household size. See current CHFA income and purchase price limits. In the Denver metro, limits are higher than most buyers expect. A household earning well into six figures can still qualify in many cases.
- Purchase price limits: Vary by county. Denver metro limits accommodate current market prices.
- Primary residence: The home must be your primary home, not a rental or investment property.
- Homebuyer education: All CHFA buyers must complete an approved online course, typically 6-8 hours, before closing.
CHFA vs a conventional loan: which one is right for you?
| CHFA Loan | Conventional Loan |
|---|---|
| Up to 3% assistance for down payment and closing costs | No built-in assistance available |
| Competitive rate through CHFA's funding | Access to lowest available market rates |
| Requires homebuyer education course | No education requirement |
| Income and purchase price limits apply | No income limits |
| Available statewide through approved lenders | Available through any lender |
The decision usually comes down to one question: how much cash do you have available? If your savings are tight, the assistance CHFA provides often makes sense. If you have strong savings and can put 10-20% down, a conventional loan at the lowest market rate typically wins over time. I run this comparison side by side for every first-time buyer I work with.
How much can you actually get from CHFA?
| Purchase Price | Loan Amount (3.5% FHA) | CHFA Assistance (3%) | What It Covers |
|---|---|---|---|
| $400,000 | $386,000 | $11,580 | Most or all closing costs |
| $500,000 | $482,500 | $14,475 | Most or all closing costs |
| $600,000 | $579,000 | $17,370 | Closing costs plus partial down payment |
The homebuyer education requirement
Every CHFA borrower must complete an approved homebuyer education course before closing. The courses are available online and typically take 6-8 hours at your own pace. The content covers budgeting, understanding your mortgage, home maintenance, and avoiding foreclosure. Start early so it doesn't hold up your closing timeline.
The bottom line on CHFA
CHFA is not the right tool for every buyer. But for Colorado buyers who are ready to own and whose main obstacle is coming up with enough cash to close, it is one of the most practical programs available. The assistance is real, the process is manageable, and thousands of Colorado buyers use it every year.
If you think you might qualify, the fastest way to know is a conversation with a CHFA-approved lender who can check your income against current limits, run the numbers on your purchase price, and tell you whether CHFA or a conventional loan makes more sense for your situation.
Chris Cartwright is a CHFA-approved mortgage broker serving first-time buyers across Colorado, Washington, Texas, California, Arizona, and Florida. He helps buyers understand which programs they qualify for and runs side-by-side comparisons so you can make an informed decision.
Find out if a CHFA loan is right for you
A 15-minute call is all it takes to check your eligibility and compare CHFA against your other options.
CHFA program details subject to change. This content is for informational purposes only. All loans subject to credit approval. Equal Housing Lender.