This Month I will highlight the second of the five most important loan programs about which consumers need to know.
The Colorado Housing and Finance Authority or CHFA was created in 1973 by the Colorado Legislature to address the shortage of affordable housing in the state. Since then, CHFA has established itself as the front-runner in the affordable housing industry by financing single family mortgages for qualifying homebuyers and supporting developments of apartments for low and moderate income residents. In 1982, whenColorado had economic difficulties, CHFA began making loans to small- and medium-sized businesses. CHFA is a responsible advocate of affordable housing and small business issues for theColorado community.
Since 1973, CHFA’s financing has served every county inColoradoby:
- Financing more than 69,000 mortgages to homebuyers
- Helping sustain and support more than 35,000 jobs
- Financing more than 54,000 residential rental units
- Allocating tax credits for 37,000 residential rental units
CHFA has a number of lending programs, but the two that I will discuss in this post are the most commonly used by the average first-time homebuyer and repeat homebuyer. CHFA FirstStep and CHFA FirstStep Plus programs, and the CHFA HomeOpener and CHFA HomeOpener Plus programs.
The CHFA FirstStep and FirstStep Plus program:
Here’s how it works:
This program has a fixed interest rate and even an optional CHFA Second Mortgage Loan to use for down-payment and closing cost assistance.
The CHFA FirstStep is a tax exempt first position mortgage loan. It offers affordable interest rates and a 30-year fixed term. Income and purchase price limits do apply (please see below). The federal Recapture Tax may apply upon sale of the home in certain situations, but CHFA will reimburse you if you have to pay it.
The CHFA FirstStep Plus program includes a second position mortgage loan for help with down-payment and/or closing costs. Just like the FirstStep, this loan has a 30-year term and market interest rate that is the same as the interest rate on the first mortgage.
Here’s how to qualify for either or both programs:
- You must be a first-time homebuyer (A first-time homebuyer is defined by CHFA as one who has not had an ownership interest in a primary residence for the three years prior to the mortgage loan closing)
- Your Income and the purchase price must be within the limits (these limits vary from county to county throughout the State, but for the Denver Metro area, the income limit is $75,900 for a 1-2 person household and $87,200 for a 3+ person household. Meaning that homebuyer’s will not qualify for this program if their salary, and/or combined salaries exceed these limits. The purchase price limit for the Denver Metro area may not exceed $365,600.
- You must attend a First-Time Homebuyer Education class (this can be done in person or online)
- You must contribute a minimum of $1000 of your own funds toward the purchase of the home.
- You must have a minimum credit score of 580.
- You must work with a CHFA-approved and participating lender.
The CHFA HomeOpener and HomeOpener Plus program:
Here’s how it works:
Just like the FirstStep and FirstStep Plus program, the HomeOpener program has a fixed interest rate and even an optional CHFA Second Mortgage Loan to use for down-payment and closing cost assistance.
The CHFA HomeOpener program:
- May be used by first-time and non-first time homebuyers
- Has no purchase price limits
- Offers market interest rates, and is available through participating lenders.
The CHFA HomeOpener Plus program:
- Has the same features as the CHFA HomeOpener program
- Offers a CHFA Second Position Mortgage Loan to help with down-payment and/or closing cost assistance.
Here’s how to qualify for either or both programs:
- Your income must be within the limits (these limits vary from county to county throughout the State, but for the Denver Metro area, the income limit is $87,600 for a 1-2 person household and $98,600 for a 3+ person household. Meaning that homebuyer’s will not qualify for this program if their salary, and/or combined salaries exceed these limits.
- You must attend a Homebuyer Education class if you are a first-time homebuyer, or a Money Management class if you are not (both classes are offered in person and online).
- You must contribute a minimum of $1000 toward the purchase of the home.
- You must work with a CHFA approved and participating lender.
To recap, the main differences between the FirstStep and HomeOpener programs are that the HomeOpener program allows for non-first-time homebuyer’s (NOTE: the non-first-time homebuyer cannot own another property) and the personal income limits are higher on the HomeOpener program which in turn opens CHFA up to more potential buyers. Although CHFA still offers a market interest rate on the HomeOpener program, it will be slightly higher than what a first-time homebuyer would receive on the FirstStep program.
Participating Lenders:
To get inquire further, and/or apply for a CHFA loan, you must contact one of CHFA’s Participating Lenders (First CalColoradois one) listed on their website at www.chfainfo.com/homebuyer. For additional information, you can also contact CHFA Home Finance directly at 888-320-3688. Approved lenders (like First Cal Colorado) can help you determine the availability of the programs and current lending terms.
Christian Durland 303-929-5702 cdurland@firstcal.net www.christiandurland.com