Colorado's Housing and Finance Authority offers down payment assistance, below-market mortgage rates, and a federal tax credit worth up to $2,000 a year. Here's how to use them.
The Colorado Housing and Finance Authority (CHFA) is a self-funded state agency that makes homeownership more affordable for Colorado buyers with low-to-moderate incomes. CHFA doesn't lend money directly - instead, it partners with approved lenders (banks, credit unions, and mortgage companies) who offer CHFA loan products with better terms than standard market loans.
CHFA programs include below-market interest rate mortgages, down payment assistance (either a grant you never repay or a low-interest second mortgage), and the Mortgage Credit Certificate - a dollar-for-dollar federal tax credit worth up to $2,000 every year you have your mortgage.
While many CHFA programs require that you haven't owned a home in the past 3 years, some programs - including HomeAccess - have no first-time buyer requirement at all. Veterans and buyers in targeted areas may also have relaxed eligibility.
CHFA offers several mortgage products designed for different buyer situations. All are 30-year fixed-rate loans with below-market interest rates and can be paired with CHFA down payment assistance.
CHFA's most popular program. A 30-year fixed-rate mortgage at a below-market rate, paired with optional down payment assistance. Available with FHA, VA, USDA, or conventional (Fannie Mae) loan types.
Most PopularFHA CompatibleVA CompatibleConventionalDesigned for lower-income buyers. Offers the deepest below-market interest rates CHFA has available. Paired with an FHA loan and CHFA's down payment assistance. Income limits are stricter than SmartStep.
Lowest RatesFHA OnlyStricter Income LimitsFor buyers who have a permanent disability or have a dependent with a permanent disability. Offers CHFA's lowest rates with no first-time buyer requirement. Paired with FHA.
No First-Time Buyer ReqDisability EligibleFor current Section 8 housing choice voucher holders. Converts your rental voucher into a mortgage payment subsidy so you can buy instead of rent. Income requirements vary by voucher.
Section 8 Voucher RequiredCHFA offers two types of down payment assistance, both calculated as a percentage of your first mortgage loan amount. You choose which works better for your situation.
The grant (up to 3%) is free money - you never pay it back. But you'll get a slightly higher interest rate on your first mortgage in exchange. The second mortgage (up to 4%) gives you more assistance and a better first mortgage rate, but you'll have a second monthly payment. Most buyers with tight budgets prefer the grant because it eliminates one more payment obligation. Your CHFA-approved lender can run side-by-side payment comparisons for your specific numbers.
On a $450,000 home with an FHA loan (3.5% down = $15,750), a 3% CHFA grant covers $13,500 - leaving only $2,250 from your own pocket. Combine with the Home Offer Ninja 1% rebate applied to closing costs and you could close with very little out of pocket.
The MCC is one of CHFA's most powerful and least-used benefits. It's a federal tax credit - not a deduction, but a dollar-for-dollar reduction in your federal tax bill - worth up to $2,000 every single year you have the mortgage. Over a 10-year period that's potentially $20,000 in total tax savings.
CHFA issues you a certificate that allows you to claim 20% to 50% of the annual mortgage interest you pay as a federal tax credit. On a $400,000 loan at 7% interest, you'd pay roughly $28,000 in interest in year one. A 20% credit on that equals $5,600 - but the IRS caps it at $2,000 per year. So you get $2,000 back on your federal taxes annually.
Lenders can factor the MCC tax credit into your income when calculating debt-to-income ratios. This can effectively increase how much home you qualify for. Ask your CHFA-approved lender to run the calculation with MCC included.
You can still take the mortgage interest deduction on your federal taxes (if you itemize), but you reduce the deductible amount by the portion you claimed as the MCC credit. Your tax professional can show you how both work together for your specific tax situation.
| Year | Mortgage Interest Paid | MCC Credit (20%) | IRS Annual Cap | You Get Back |
|---|---|---|---|---|
| Year 1 | ~$28,000 | $5,600 | $2,000 | $2,000 |
| Year 5 | ~$26,500 | $5,300 | $2,000 | $2,000 |
| Year 10 | ~$24,000 | $4,800 | $2,000 | $2,000 |
| 10-Year Total | - | - | - | ~$20,000 |
Example based on $400k loan at 7%. Actual amounts vary. Consult a tax professional.
| Area | 1-2 Person Household | 3+ Person Household |
|---|---|---|
| Denver Metro (most counties) | ~$120,000 | ~$138,000 |
| Boulder County | ~$130,000 | ~$149,500 |
| Colorado Springs (El Paso) | ~$105,000 | ~$120,750 |
| Fort Collins (Larimer) | ~$118,000 | ~$135,700 |
| Pueblo County | ~$90,000 | ~$103,500 |
Limits are updated annually. Visit chfainfo.com for current figures by county.
CHFA counts the income of all adults who will live in the home - not just the borrowers on the loan. If you have a partner or roommate who isn't on the mortgage but will live there, their income counts toward the household total.
You can't go directly to CHFA - you apply through a CHFA-approved lender. Here's the process:
Search the lender directory at chfainfo.com. Not all banks are CHFA-approved. Call at least 2-3 to compare rates and experience with CHFA products.
CHFA requires all borrowers to complete an approved homebuyer education course (typically 6-8 hours, available online). You'll receive a certificate you'll need at closing. Cost is usually $75-$125.
The lender checks your income, credit, and assets against CHFA program requirements. They'll tell you which CHFA program you qualify for and the maximum loan amount.
Your lender walks you through the trade-offs and runs payment comparisons so you can make an informed decision.
The MCC must be requested at the time of your loan application - you can't add it after closing. Ask your lender upfront about the MCC if you want it.
Your agent works with your CHFA lender. At closing, your DPA grant or second mortgage funds are applied alongside your first mortgage. Your 1% Home Offer Ninja rebate is also applied here.
Here's an example of how CHFA and the Home Offer Ninja rebate can work together on a $450,000 home purchase:
| Cost / Benefit | Amount |
|---|---|
| Purchase price | $450,000 |
| FHA down payment (3.5%) | $15,750 |
| CHFA DPA grant (3% of loan) | -$13,500 (covers most of down payment) |
| Estimated closing costs (3%) | $13,500 |
| Home Offer Ninja 1% rebate | -$4,500 (applied to closing costs) |
| Approx. out-of-pocket | ~$11,250 |
| Annual MCC tax credit (ongoing) | Up to $2,000/year |
CHFA and the Home Offer Ninja rebate come from completely different sources - CHFA from state assistance, the rebate from your agent's commission. There's no conflict between them. Your lender and agent coordinate to make sure both are reflected in your closing documents.