Colorado First-Time Homebuyer Guide: CHFA DPA Rules 2026

A Denver-area couple reviews homebuying documents outside a Colorado home, with the Front Range foothills nearby.

Colorado prices mean the down payment, not just the monthly payment, can be what stops a first-time buyer from making an offer. That’s the problem down payment assistance can help solve. I’m Corey Friedrich, and I want you to understand what the assistance actually covers, what you’ll owe later, and which limits apply before you count on it.

CHFA programs can offer a grant that doesn’t have to be repaid or a deferred second mortgage that does. Those are not interchangeable. In particular, FirstStep does not offer a forgivable grant.

1. CHFA Grant vs. 0% Deferred Second Mortgage: Comparing Options

The key choice is between receiving less assistance that you don’t repay, or potentially more assistance that becomes a second lien you must repay when a triggering event occurs.

Assistance option	Maximum assistance	Interest and payments	Repayment
CHFA SmartStep Plus grant	Lesser of 3% of the first mortgage amount or $25,000	Grant; no monthly payment	No repayment
CHFA SmartStep Plus second mortgage	Lesser of 4% of the first mortgage amount or $25,000	0% interest; no monthly payment; deferred	Repay at sale, refinance, or when the home is no longer your primary residence
CHFA FirstStep second mortgage	Lesser of 4% of the first mortgage amount or $25,000	0% interest; no monthly payment; deferred	Repay at sale, refinance, or when the home is no longer your primary residence; never forgiven

CHFA’s homeownership program information is a useful starting point, but you apply through a CHFA-participating lender, not directly through the state.

Here’s the math on a $500,000 Colorado home using FHA financing:

• FHA down payment at 3.5%: $17,500
• Base first mortgage after the down payment: $482,500
• SmartStep Plus grant: $482,500 × 3% = $14,475
• Remaining down payment after the grant: $17,500 − $14,475 = $3,025
• Alternative second mortgage: $482,500 × 4% = $19,300

The grant percentage applies to the first mortgage amount, not the home’s purchase price, which is why using 3% of $500,000 would overstate the assistance. The grant gives you less money, but no amount to repay; the second mortgage offers more in this example, but you must repay it under the program terms. Your time horizon and plans matter, so compare both options with your lender rather than assuming one is automatically better.

And $3,025 is only the remaining down payment in this example. Closing costs, prepaid expenses, and earnest money are separate, so that figure is not your total cash-to-close.

For a broader look at low-down-payment loan structures, see my related guide to FHA versus conventional loans with 3% down.

Confirm before you count on assistance:
✔ Check whether the specific property address is in a federally designated targeted census tract.
✔ Confirm your lender is CHFA-participating and offering the program you’re considering.
✔ Verify the income and purchase-price limits effective on your application date.
✔ Ask whether assistance funds are available and can be reserved for your transaction.

2. 2026 Household Income & Purchase Price Limits Across Key Counties

For SmartStep and CHFA Preferred, the statewide income limit is $178,920, effective June 15, 2026. It does not vary by household size or county. SmartStep uses FHA, VA, or USDA-RD underwriting guidelines, and the minimum credit score is typically 620. A lender’s underwriting requirements may be stricter.

FirstStep limits are county-specific and vary by household size and the property’s targeted-area status. These 2026 figures are effective June 15:

County and area	Household size	Income limit	Purchase-price limit
Denver, non-targeted	1–2	$144,000	$832,750
Denver, non-targeted	3+	$165,600	$832,750
Denver, targeted	1–2	$172,800	$832,750
Denver, targeted	3+	$201,600	$832,750
El Paso, non-targeted	1–2	$127,800	$566,730
El Paso, non-targeted	3+	$146,970	$566,730
El Paso, targeted	1–2	$153,360	$692,670
El Paso, targeted	3+	$178,920	$692,670

A “targeted area” is a federally designated census tract. The property address determines which limit applies, not the county as a whole. A home in one part of Denver County may be subject to a different income limit from a home elsewhere in the same county. Ask your lender to check the exact address before you build your budget around a targeted-area limit.

Denver’s purchase-price limit is a program limit, not the same thing as a mortgage loan limit. If your financing amount approaches a high-balance or jumbo threshold, you may also want to read about high-balance conforming versus jumbo loans.

3. Stacking Options: metroDPA (Denver) & Local Assistance Programs

metroDPA is a separate down payment assistance option for Denver and participating Front Range communities. It provides a 30-year, zero-percent deferred second mortgage with no scheduled monthly payments. It is not forgiven: repayment is due upon sale, refinance, or after 30 years.

The stated income eligibility goes up to $216,000 for FHA, VA, and USDA loans. The minimum FICO score is generally 640. You must work with a metroDPA-approved lender, and the property must be your primary residence. Buyers in Colorado Springs should confirm that the specific property address is within a participating jurisdiction. Check current requirements with metroDPA and the City and County of Denver.

Denver metroDPA homebuyer income limits in Colorado are distinct from CHFA’s income limits. Don’t assume that meeting one program’s limit qualifies you for the other, or that assistance from separate programs can simply be combined. Ask the lender to compare eligibility, assistance amount, first-mortgage rate, repayment terms, education requirements, and funds available for the property you’re considering.

CHFA’s FirstGeneration program may be another option if you meet its specific requirements. It provides a $25,000, zero-percent deferred second mortgage with no monthly payments, repayable at sale, refinance, or when the home is no longer your primary residence. At least one borrower must be a first-generation homebuyer: they have never owned a home, and neither parent nor guardian owned a home during that borrower’s lifetime. Borrowers who have been in foster care are exempt from the parental ownership test but must still be first-time homebuyers. All borrowers on the loan must be first-time homebuyers.

FirstGeneration uses a 30-year fixed FHA 203(b) purchase loan and typically requires a minimum 620 credit score. It also requires a CHFA compliance review before closing and CHFA Forms 401 and 402. All CHFA borrowers must complete CHFA-approved homebuyer education.

A homebuyer reviews financing details in Colorado Springs, where the local address and program rules can shape eligibility.

How to Get Pre-Approved for Colorado Down Payment Assistance

Here’s the order I recommend so you can avoid choosing a home first and checking eligibility later:

1. Choose a participating lender. CHFA and metroDPA assistance must be originated through a participating or approved lender. The assistance isn’t obtained directly from the state or city.
2. Review your full financial picture. Share income, assets, debts, and credit information so the lender can evaluate the first mortgage and the assistance program together.
3. Compare the actual options. Ask for side-by-side estimates showing the first-mortgage rate, assistance amount, estimated cash-to-close, and any repayment triggers. Be specific about grant versus second mortgage.
4. Check household and property eligibility. Have the lender review the current income and purchase-price limits, confirm targeted-area status using the property address, and verify whether a metroDPA jurisdiction participates.
5. Complete required education and paperwork. All CHFA borrowers must complete CHFA-approved homebuyer education. FirstGeneration buyers also need the compliance review and required forms before closing.
6. Confirm current terms before making an offer. Ask the lender to recheck the applicable effective date and funding availability. Program terms can change while you’re shopping.

FAQ

Does CHFA down payment assistance have to be repaid?
It depends on the option. The SmartStep Plus grant is not repaid. SmartStep Plus and FirstStep second mortgages must be repaid under their terms; FirstStep assistance is never forgiven.

Can a repeat buyer use assistance?
Possibly, depending on the specific program and eligibility rules. Don’t assume the same first-time-buyer requirements apply to SmartStep, CHFA Preferred, FirstStep, and metroDPA. Have a participating lender check the program you’re considering.

Is Colorado Springs eligible for first-time homebuyer assistance?
There may be options, including CHFA programs and metroDPA in participating Front Range jurisdictions. Eligibility depends on the program, lender, and exact property address.

Bottom line

If you’re looking for first time home buyer assistance in Colorado Springs, Denver, or another Colorado community, start with the address and the program rules, then compare the grant and deferred-loan paths. The biggest pitfall is treating every “assistance” dollar as free money. A grant and a second mortgage can reduce your upfront cash in different ways, but only one of those options has no repayment obligation.

A Colorado couple celebrates their new home, with the Front Range landscape behind them.

Down payment assistance programs and lender guidelines change, and lenders may apply their own overlays and minimum requirements. Confirm current program terms and funds with a participating lender before relying on assistance for a purchase.

Corey Friedrich, NMLS #2746546
Mortgage Loan Officer | Remote Online Notary
BestDealFirst.com | Buy, Refi, Home Equity or Notarize
Direct Line: 909-550-1146 (Call or Text)
Email: Corey@BestDealFirst.com
Website: www.BestDealFirst.com
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