With all the tightening of mortgage rules and elimination of ‘creative’ financing options, it was refreshing for me to attend a seminar last week by the Colorado Housing and Finance Authority (CHFA or CHAFA) on low down payment options for 1st time homeowners.
I am not going to be able to cover all of the ins and outs of these programs in this article, but here are some of the highlights of their most popular program, the FirstStep Program:
- You have to be a first time home buyer to participate. Technically, that means you cannot have owned a home within the prior 3 years. They have other programs for those who have owned homes previously.
- In El Paso County, the purchase price limit is $236,800
- You can’t make too much money. The income limits in El Paso County are $56,800 for a household of 1, $71,000 for 2, and $81,600 for 3 or more.
- You have to take a class, although they have an online version of this if you are not able to make a class fit your schedule. These classes are rumored to be excellent basics on home ownership and money management, they are free, and are worth attending even if you don’t either buy a house or use a CHFA loan.
- You have to have at least $1,000 of your own money (not gift or borrowed) in the transaction, so it is NOT a completely zero down program
- The CHAFA assistance is 3% of the purchase, which does not quite cover the full 3.5% FHA down payment requirement, so more down payment may be required than just the $1,000, although not much.
- These are OWNER OCCUPIED properties only, so this is not a program for investors
So if you didn’t get in on the tax credit program, not to worry. There are still ways to own your own home without having a big down payment saved up. If this program sounds interesting to you, please visit the CHAFA website directly, or call Rick Van Wieren at 888-568-6784 or email me at email@example.com.