Colorado First-Time Home Buyer Grants: CHFA, metroDPA, and CHAC Compared

Saving a full down payment on a Colorado home is genuinely hard. The median home price in Denver hovers around $540,000, and even a 3.5% FHA down payment on that is nearly $19,000 before you account for closing costs. Colorado has a well-funded set of programs designed specifically for this problem — but the programs are different enough that picking the wrong one can cost you thousands of dollars over the life of your loan.

Here is what each major program actually does, who qualifies, and how to decide between them.

CHFA: The State's Primary Program

The Colorado Housing and Finance Authority (CHFA) is the anchor program for first-time buyers in the state. CHFA does not lend directly — it operates through a statewide network of approved participating lenders who underwrite and originate the loans on CHFA's behalf. Your first step is finding a CHFA-approved lender, not applying to CHFA itself.

CHFA offers two types of down payment assistance, both requiring a CHFA first mortgage as the paired loan:

The 3% non-repayable grant. This is a true grant — no repayment, no lien on your property. The lender offsets the cost through a slightly higher interest rate on the first mortgage, typically 0.50% to 1.00% above what you would pay on a standard conventional loan.

The 4% deferred second mortgage (silent second). This places a second lien on the property at 0% interest with no monthly payments. It is capped at $25,000 on high-tier programs. The full balance becomes due when you sell, refinance, or the home stops being your primary residence. If rates drop and you want to refinance, you must repay this second mortgage in full first — a real constraint if your home has not appreciated enough.

CHFA Income Limits for 2026

Income limits depend on which program you use:

• CHFA SmartStep and SmartStep Plus (FHA/VA/USDA loans): Flat statewide qualifying income limit of $174,440, regardless of county or household size. This is based on the income of borrowers on the loan note only — a working spouse not on the loan does not count against you.
• CHFA Preferred and Preferred Plus (conventional Fannie/Freddie loans): County-specific limits based on Area Median Income, typically ranging from $120,000 to $160,000 depending on where in the state you are buying.

The CHFA FirstGeneration and FirstGeneration Plus programs provide up to $25,000 in deferred DPA for buyers whose parents or guardians never owned a home, or who grew up in foster care. These are paired with a 30-year FHA loan and require a 620 minimum credit score.

All CHFA programs require completion of an approved 8-hour homebuyer education course before closing. Plan for this early — it cannot be rushed.

Funding cycles matter. CHFA releases its annual allocation in January. High-tier $25,000 DPA programs historically run out of funding by April or May. If you want the best programs, have your education done by December, engage a participating lender in January to reserve funds in Q1, and aim to close in Q2.

metroDPA: The Stronger Option for Many Front Range Buyers

metroDPA operates across the Front Range from Castle Rock to Wellington and is administered through eHousingPlus. It has several significant advantages over CHFA:

• Income limit of $210,150 (or $216,000 in select counties) — well above CHFA's conventional limits
• No first-time homebuyer requirement — repeat buyers can use it
• No purchase price limits
• Minimum 640 credit score (620 in some cases)
• Structured as a 30-year, 0% deferred second mortgage

The trade-off is geography. metroDPA only applies in participating jurisdictions. If you are buying in a rural county or mountain community outside the Front Range, you may not qualify.

For buyers in the $150,000–$210,000 income range who exceed CHFA's conventional limits but cannot save a full down payment, metroDPA is often the better fit. It can also be worth checking whether metroDPA can be stacked with a CHFA first mortgage — your lender can advise on current program layering rules.

CHAC: The Option for Lower-Income Buyers

The Colorado Housing Assistance Corporation (CHAC) provides low-interest second loans for buyers earning at or below 80% of the Area Median Income. Unlike CHFA's grant or silent second, CHAC loans carry a nominal interest rate and require a minimum borrower contribution of 1% of the purchase price — and that 1% must come from your own funds, not a gift.

CHAC is the right tool for buyers who need the lowest-cost financing and qualify on income, but it is less flexible than metroDPA for buyers who might receive gift funds.

Stacking Programs

Boulder County's DPA program provides up to 10% of the purchase price (capped at $40,000) for first-time buyers purchasing outside Boulder city limits. The City of Aurora's HOAP program offers up to $10,000 for purchases within Aurora city limits. These municipal programs can sometimes be layered with CHFA first mortgages — which is where working with a participating lender who knows your specific county becomes essential. A generic lender who does not specialize in Colorado DPA programs will often miss these stacking opportunities.

Which Program Should You Use?

Run through this decision tree:

1. Do you earn under $120,000–$160,000 (depending on county) and have a 620+ credit score? → Start with CHFA Preferred Plus (conventional) or CHFA SmartStep Plus (FHA/VA). The conventional option lets you cancel PMI once you reach 80% LTV.

2. Do you earn $120,000–$210,000 and are buying on the Front Range? → metroDPA is likely your best option. Check your county's participation.

3. Are you a first-generation buyer or have foster care experience? → CHFA FirstGeneration provides up to $25,000 — the most assistance available statewide.

4. Do you earn under 80% of AMI and have your own 1% contribution? → CHAC's low-interest second loan may be the cheapest long-term option.

5. Are you a veteran? → CHFA SmartStep paired with a VA loan requires 0% down from the VA benefit and adds up to $25,000 in DPA on top.

The Colorado First-Time Home Buyer Guide at /us/colorado/first-home/ covers CHFA, metroDPA, and CHAC with a side-by-side comparison worksheet that accounts for the rate premium, the refinancing trap, and the true 30-year cost difference between the grant and the silent second — numbers that do not appear in any program brochure.

The Rate Premium Is Real

None of these programs are free money in the simplest sense. The CHFA grant (3% non-repayable) is absorbed through a higher rate on your first mortgage. On a $400,000 loan, a 0.75% rate premium costs roughly $1,800 per year in additional interest. If you stay in the home for more than five years, the grant still wins — but it is worth running the numbers against a standard conventional loan with a gift-funded down payment if you have family who can contribute.

metroDPA's deferred second mortgage and CHFA's silent second both require payoff at refinancing. If rates fall significantly in the next two to three years — as many buyers expect — the locked-in second mortgage will constrain your options. The Colorado-specific guide walks through the exact breakeven calculation for each scenario.

The programs exist because Colorado's housing market genuinely demands them. Use the right one for your situation, lock your reservation early, and get the homebuyer education done before you start making offers.

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