Denver Area Down Payment Assistance Programs- Part 2

Down Payment Assistance Programs- First Time Home Buyers

Links to Part 1 and Part 3 of this blog post.

Local Denver area Housing Authorities also offer down payment assistance programs to first time home buyers, or someone who has NOT owned a property for the last 3 years. Income limits do apply, and these limits are reset every April by Housing and Urban Development (HUD). The income limits are equal to 80% of the area median income (AMI). The AMI is for Denver metro, as a whole, and is not broken down by city or county. In order to qualify for down payment assistance with the local housing authorities, the buyer is required to attend an 8-hour first time home buyer course, and this must be completed PRIOR to writing an offer on a home. Once the course is completed, the buyer must meet with a housing counselor to determine eligibility for the program.

The down payment assistance that is available to the first time home buyer is dictated by where the buyer is planning to make their home purchase. As with the CHFA programs, the area housing authority down payment assistance programs will be utilized in conjunction with whatever loan program the buyer qualifies for. As with all of the programs listed below, funds are limited, so not all qualified buyers will be able to take advantage of them.  It will be important to check with the authorities at the start of the house hunt to see how the funding looks.

Here are some of the programs that the local housing authorities are currently offering to first time home buyers:

ACHA: Adams County Housing Authority: ACHA offers $7,000 in assistance to go toward down payments and non-recurring closing costs (can’t be used for pre-paids or reserves). This becomes a “silent” second mortgage, meaning that there are no payments by the buyer and no accruing interest on the loan. This loan is forgivable (you don’t have to pay it back) at a rate of 10% per year, so if you live in the house for 10 years, you don’t pay any of the $7K back. If you sell the house or refinance prior to 10 years, you will repay the loan at a prorated amount based on the length of time you spent in the property. The buyer is required to have a minimum investment of 1% of the purchase price of their own money in the transaction. These ACHA funds are also available for all of Westminster, even if the property is not located in Adams county. In order to qualify, the buyer’s debt-to-income ratio cannot exceed 44% and their housing ratio cannot exceed 33%.

HOAP: Aurora Home Owner Assistance Program: This program is for those purchasing a home within the city limits of Aurora. Again, with this one, the buyer needs to contribute (of their own funds) 1% or more of the purchase price into the transaction. The buyer can receive up to $10,000 to go toward down payment and allowable closing costs. This is a “silent” second mortgage meaning that there are no payments. It is a 30 year loan, with  3% simple interest accruing in the first 5 years only. The loan is due and payable in full when the home owner sells the property or the loan is refinanced. This is a great program to help first time home buyers get into a home if they don’t have the extra funds to pay for closing costs and/or a down payment. However, this loan is not forgiven- the owner will need to pay this back. The interest rate is very low on it though , and interest only accrues for the first 5 years, which makes it a very affordable option. HOAP will only close 10 transactions per month in an effort to keep funds available to buyers throughout the year.

Del Norte Neighborhood Development Corporation: This is for properties purchased in Denver county. It requires a minimum buyer investment of $1000 of the buyer’s own funds. The loan amount can go up to $15,000, with 0% interest, and no payments. This loan amount is due upon the first mortgage payoff, sale of property or transfer of ownership.

DCHP: Douglas County Housing Partnership: DCHP has 2 different programs available. The first requires a $1000 minimum buyer investment. DCHP offers 5% of the purchase price of the home to be used towards the down payment. However, these funds cannot be applied toward closing costs. The buyer has a couple of options in regard to paying back this loan- either making payments immediately at a lower interest rate and for a shorter term or deferring payments, at a higher interest rate over 30 years. The buyer must live in Douglas County for at least 12 months prior to applying for DCHP assistance OR work in Douglas County for at least 20 hours per week. The maximum debt-to-income ratio is 45%. And the property cannot be tenant occupied at the time of purchase.

The second DCHP program is more of a shared equity program. The buyer still needs to contribute $1000 into the transaction. DCHP will provide an investment of 20% of the purchase price for down payment assistance. Payment on this loan is deferred until the property is sold or refinanced. At this time the owner will pay DCHP back 20% (or the same original investment % made by DCHP) based on the fair market value of the home. So if the property depreciates in value, the amount that is paid back also goes down. The maximum purchase price is $250,000. The buyer must live in Douglas County for at least 12 months prior to applying for DCHP assistance OR work in Douglas County for at least 20 hours per week. And the property cannot be tenant occupied at the time of purchase.

Stay tuned for Part 3 of this blog, which will talk about the home buyer programs that the Colorado Housing Authority Corporation (CHAC) offers.

The difficult part about writing a blog of this nature is that the information changes very quickly, as each program’s guidelines are dictated by a different housing authority. This information is correct, as of July 2013. Want to know the latest? Give me a call at 303-378-9333 or send me an email and I’d be happy to answer any of your questions!

Incoming search terms:

  • denver down payment assistance
  • down payment assistance programs in colorado

Comments (3)

Trackback URL | Comments RSS Feed

  1. Sharon Campbell says:

    Interested in receiving information on Del Norte

  2. admin says:

    Hi Sharon- thanks for your inquiry. I just sent you an email with information on the Nel Norte program. Please let me know if you have any questions!

  3. I’ve been surfing online more than 2 hours today, yet I never found any interesting article like yours.

    It’s pretty worth enough for me. In my opinion, if all website owners
    and bloggers made good content as you did, the internet will
    be much more useful than ever before.

Leave a Reply

Your email address will not be published. Required fields are marked *