Buying in Denver but worried about the down payment or closing costs? You’re not alone. Many first-time buyers use a mix of loans and assistance to get the keys sooner without draining savings. In this guide, you’ll learn the major Denver and Colorado programs, how they work, who qualifies, and how to move from preapproval to closing with confidence. Let’s dive in.
What “first-time buyer” means
Most programs define a first-time buyer as someone who has not owned a primary residence in the past three years. Some programs make exceptions for certain groups, like eligible veterans. Always confirm the exact definition with your lender or the program administrator before you apply.
Program types at a glance
Federal loans
- FHA loans: Low down payment options and flexible credit guidelines. Mortgage insurance is required.
- VA loans: No-down-payment options for eligible service members and veterans. No private mortgage insurance, though a funding fee may apply.
- USDA loans: Zero-down options in designated rural areas. Most of Denver is not USDA-eligible, but some outlying areas may qualify.
- Conventional low-down-payment: Fannie Mae HomeReady and Freddie Mac Home Possible can allow 3 percent down with private mortgage insurance until you reach 20 percent equity.
CHFA state programs
Colorado Housing and Finance Authority (CHFA) offers first-time and repeat-buyer mortgages that can pair with down payment and closing cost assistance. CHFA works through approved lenders and typically uses income, purchase price, and sometimes location limits. Many buyers layer a CHFA first mortgage with CHFA assistance.
Denver city assistance
The City and County of Denver has offered down payment and closing cost assistance and often requires homebuyer education for recipients. Assistance is usually a deferred or forgivable loan tied to income limits and used for purchases within Denver city limits. Program terms and funding availability can change, so verify current details before you write an offer.
Nonprofit and employer help
Local nonprofits, community land trusts, and Habitat-style models may provide affordable homeownership or shared-equity opportunities. Some large employers offer grants or loans to help employees live nearby. These programs commonly include income limits, occupancy requirements, and resale or shared-equity rules.
Layering assistance
Many Denver buyers combine a first mortgage with a second-lien down payment assistance loan. Terms vary by provider. Some programs limit stacking, so check with your lender about which combinations are allowed.
Eligibility basics
- First-time buyer status: Typically no ownership of a primary home within three years, with possible exceptions.
- Income limits: Many programs use Area Median Income for Denver County and adjust by household size.
- Purchase price caps: Assistance programs often set a maximum purchase price.
- Primary residence: You must live in the home as your primary residence.
- Homebuyer education: Many programs require an approved course and sometimes one-on-one counseling before closing.
- Credit and underwriting: Each program has minimum standards for credit, debt-to-income, and reserves. Approved lenders confirm specifics.
How assistance loans work
Second-lien assistance is usually one of the following:
- Forgivable loan: Forgiven over time if you stay in the home. Selling or moving early can trigger repayment.
- Deferred payment loan: No monthly payment while you live there. The balance is due when you sell, refinance, or transfer.
- Amortizing second mortgage: Requires monthly payments at a set interest rate.
Programs often record a lien. Follow occupancy rules and understand any repayment triggers before you sign.
Step-by-step timeline
Step 1: Prequalify with the right lender
Talk to a lender experienced with CHFA and Denver programs. Ask whether they are approved by CHFA and any local assistance programs you plan to use.
Step 2: Complete education early
Enroll in the required homebuyer education course as soon as you start. Some programs want the certificate before approval, not just before closing.
Step 3: Shop and write offers
Confirm the property meets program purchase price and location rules before you submit an offer. Your agent can help structure terms that allow for program timelines.
Step 4: Apply for assistance
Your lender usually submits CHFA and city assistance applications along with your loan file. Some city programs require a separate buyer application.
Step 5: Underwriting and approvals
Expect extra documentation and an extended timeline compared with a standard mortgage. Build in buffer time in your contract contingencies.
Step 6: Close and fund
Bring your education certificate and all program documents to closing. Confirm if assistance funds are wired at closing or require post-closing verification.
Typical timing: Plan on a standard mortgage timeline plus about 1 to 3 additional weeks for program approvals. Exact timing depends on lender capacity and program demand.
Pros, cons, and pitfalls
Pros
- Lower upfront cash to close can make homeownership more attainable.
- Forgivable or deferred assistance can ease monthly pressure while you build equity.
- Education and counseling improve budgeting and long-term stability.
Cons and risks
- Resale or refinance rules may require repayment or limit flexibility.
- A second lien reduces net proceeds when you sell and can limit equity growth in shared-equity models.
- Property restrictions can narrow your options in a competitive market.
- Extra paperwork and timing can make offers less agile without proper planning.
Common pitfalls to avoid
- Starting with a lender who is not approved for CHFA or Denver programs.
- Waiting too long to complete the required education.
- Assuming assistance covers everything. Prepaids, reserves, and inspections may not be included.
- Missing income or purchase price caps until after you go under contract.
- Ignoring mortgage insurance costs on low-down-payment loans.
Documents you will need
- Government-issued ID and Social Security number
- Recent pay stubs and W-2s
- Federal tax returns and bank statements
- Documentation for gift funds, if any
- Retirement or other asset statements for reserves
- Divorce or child support documents if applicable
- Statements for current debts
- Homebuyer education certificate
- Preapproval from a participating lender
Strategy for Denver’s market
- Build time into your offer: Use realistic financing and assistance deadlines.
- Strengthen your file: Complete education early, provide full documentation, and secure a solid preapproval from an approved lender.
- Be flexible on terms: Consider earnest money strength and clear inspection timelines to reassure sellers without adding risk.
- Target property types wisely: Ensure the home meets appraisal and habitability standards required by your loan and assistance program.
- Confirm stacking: If you plan to combine CHFA with Denver assistance, have your lender verify in writing that the programs are compatible.
Who to contact to verify details
- City and County of Denver housing offices for local assistance, income limits, and education requirements
- Colorado Housing and Finance Authority for CHFA mortgages, assistance, and approved lenders
- HUD and FHA for national loan rules and lists of HUD-approved housing counselors
- VA Regional Loan Centers for Colorado-based VA loan guidance
- USDA Rural Development for rural eligibility maps and program information
- HUD-certified housing counseling agencies in the Denver area for classes and one-on-one counseling
Ready to take the next step?
If you want a clear plan to use CHFA or Denver assistance and still compete in today’s market, let’s map it out. The Chelsey Franklin Group helps you coordinate lender approvals, education timelines, and offer strategy so you can move from preapproval to keys with fewer surprises. Reach out to the Chelsey Franklin Group to start your first-time buyer plan today.
FAQs
What first-time buyer programs exist in Denver?
- Denver buyers commonly use FHA, VA, USDA in eligible areas, CHFA mortgages with assistance, city down payment programs, and select nonprofit or employer options.
Can I combine CHFA with Denver down payment help?
- Possibly, but stacking rules vary by program, so your approved lender must confirm which combinations are allowed.
Does assistance affect my ability to refinance later?
- Some assistance has repayment or recapture rules at refinance or sale, so review the lien terms and forgiveness schedule before you commit.
How long does closing take with assistance in Denver?
- Expect a standard mortgage timeline plus about 1 to 3 extra weeks for program approvals, depending on lender capacity and program demand.
Do I have to live in the home to keep assistance?
- Yes, programs generally require the property to be your primary residence, and moving out early can trigger repayment.
Is homebuyer education required for Denver programs?
- Many state and local programs require an approved course and sometimes counseling, and some want the certificate before program approval.
How much down payment assistance can I receive?
- Amounts and caps change frequently and differ by program, so check current limits with the program provider or your participating lender.
