Saving for a down payment in Aurora can feel like the biggest hurdle between you and homeownership. You want clear answers on how to bring your upfront costs down without surprises at closing. In this guide, you’ll learn how Colorado Housing and Finance Authority (CHFA) down payment assistance works in Aurora, who typically qualifies in Arapahoe County, how it affects your offer and timeline, and the exact steps to take next. Let’s dive in.
CHFA DPA in Aurora: the essentials
CHFA is Colorado’s state housing finance agency. It offers first-mortgage products along with down payment assistance that can help cover part of your required down payment and closing costs. In Aurora, you pair CHFA’s assistance with a CHFA-approved first mortgage, and both are underwritten and closed at the same time.
You must use the home as your primary residence. Program details such as income limits, purchase-price limits, assistance amounts, and forgiveness terms change periodically. Confirm current terms with a CHFA-approved lender before you shop.
How it pairs with your mortgage
CHFA assistance is usually a second mortgage, a forgivable lien, or funds tied directly to a CHFA first mortgage product. Your lender bundles the first mortgage with the assistance, verifies combined loan-to-value limits, and coordinates the extra compliance checks and documents. Expect a bit more paperwork and coordination than a standard first-mortgage-only loan.
Types of CHFA assistance
Deferred-payment second
- What it is: A second lien with no monthly payment. The principal, and sometimes interest, is due when you sell, refinance, or pay off the first mortgage.
- Why it helps: You reduce cash due at closing without adding to your monthly payment. Be prepared for a payoff when you move or refinance.
Forgivable second mortgage
- What it is: A second lien that is forgiven after you live in the home for a set period while keeping it as your primary residence.
- Why it helps: If you stay long enough, it functions like a grant. Until it’s forgiven, the lien remains on title.
Repayable second mortgage
- What it is: A second mortgage with monthly payments and set terms.
- Why it helps: Lowers upfront cash needed, but adds a monthly payment obligation alongside your first mortgage.
Bundled with a CHFA first mortgage
- What it is: A CHFA first mortgage paired with eligible assistance in one package through a CHFA-approved lender.
- Why it helps: One application and one closing. You must work with a participating lender and meet program rules.
Combining with other programs
CHFA funds can sometimes be layered with other local or federal assistance, but stacking rules apply. If you plan to request seller credits or use another grant, your lender must confirm compatibility and recording order.
Who qualifies in Arapahoe County
Eligibility can vary by product, but buyers in Aurora commonly need to meet these guidelines:
- Primary residence: The property must be your primary home. Investment and second homes are not eligible.
- CHFA-approved lender: Apply through a participating CHFA lender. Not every bank or credit union participates.
- Income limits: Household income must be within CHFA’s limits for Arapahoe County. Limits vary by household size and change over time.
- Purchase-price limits: The home’s price must fall within CHFA’s county limits for the program you use.
- First-time buyer status: Some programs require first-time buyer status, often defined as no homeownership in the past three years. Others allow repeat buyers.
- Credit and DTI: You must meet minimum credit score and debt-to-income guidelines based on the loan type and any lender overlays.
- Homebuyer education: Many CHFA options require completing an approved homebuyer education course before closing.
- Property type: Single-family homes, townhomes, condos, and some manufactured homes may be eligible. Condos may require project approval.
- Documentation: Expect standard mortgage documentation such as pay stubs, W-2s, tax returns, bank statements, government ID, and Social Security numbers.
- Residency status: Certain non-U.S. citizen statuses can qualify, subject to program and lender rules.
How CHFA affects offers and closing
Get preapproved early
Start with a CHFA-approved lender to confirm both your first mortgage and assistance eligibility. Complete homebuyer education early if required so it does not delay your file.
Write a strong offer with DPA
Include financing contingencies that reference CHFA or your CHFA-approved lender. Some sellers worry about delays with assistance. A clear preapproval letter and defined timeline can help the seller feel confident in your offer.
Appraisal, CLTV, and your bottom line
CHFA assistance affects combined loan-to-value, also called CLTV. If the appraisal comes in low, the lender may need to adjust the first mortgage and assistance amounts, or you and the seller must address the price gap. Talk with your agent and lender about how you will handle a potential shortfall.
Seller concessions and closing costs
Seller concessions can usually cover certain closing costs within program limits. The seller cannot typically provide you with down payment funds directly. Have your lender confirm allowable amounts before you write the offer.
Title, lien recording, and payoff
Because CHFA assistance is often a second lien, the title company needs extra documents and instructions. At sale or refinance, the second lien may need to be paid off unless it is fully forgiven. Your lender will explain the payoff terms.
Timeline to close
Adding assistance increases coordination. Extra turn-time may be needed for CHFA compliance checks, education verification, and additional lien documents. Plan for a slightly longer contract period than a standard loan and build that into your offer strategy.
Avoid common pitfalls
- Waiting too long to complete homebuyer education.
- Applying with a non-participating lender.
- Not understanding whether your assistance is deferred, forgivable, or repayable.
- Ignoring appraisal and CLTV impacts on your approval.
Step-by-step: your path in Aurora
Immediate steps
- Contact a CHFA-approved lender serving Aurora to review current CHFA products and Arapahoe County income and purchase-price limits.
- Complete an approved homebuyer education course if your program requires it.
- Gather documents for preapproval: government ID, recent pay stubs, W-2s, tax returns, bank statements, and Social Security numbers.
- Obtain a CHFA preapproval letter that names the intended assistance type when possible.
During home search and offers
- Build in a financing contingency referencing CHFA assistance or your CHFA-approved lender.
- Set an appraisal strategy with your agent and lender in case the value comes in low.
- If you need seller credits for closing costs, verify allowable amounts in advance.
Contract to close
- Confirm the closing timeline with your lender, title company, seller, and agent, allowing extra time for CHFA documents and recording.
- Ensure the lender orders any CHFA-required verifications and coordinates recording of the second lien.
What to confirm before you offer
- The CHFA assistance type you plan to use and whether it is deferred, forgivable, or repayable.
- Current Arapahoe County income and purchase-price limits.
- Property eligibility for the specific home type you are shopping.
- Combined LTV limits and potential impacts on mortgage insurance and rate.
- Expected underwriting timeline and any lender overlays.
Work with a local guide
CHFA assistance can be a smart way to unlock homeownership in Aurora, especially if you want to keep more cash on hand for move-in costs and reserves. The key is clear coordination between you, your lender, title, and your agent so your offer stays strong and your closing stays on track.
You do not have to navigate this alone. As a Denver-native, owner-operated REALTOR who serves Aurora and the greater metro, Michael provides hands-on guidance from search to close. Se habla español. If you are considering CHFA assistance, he will coordinate with your CHFA-approved lender, structure contingencies that protect you, and set expectations with the seller so everyone understands the timeline and steps.
Ready to explore CHFA options for your Aurora purchase? Connect with Michael Todd to plan your path and shop with confidence.
FAQs
Does CHFA DPA increase my mortgage interest rate?
- Not necessarily. The assistance is a separate, subordinate loan. Your first-mortgage rate depends on your loan product and credit profile, though some paired programs have different pricing. Confirm details with your lender.
Will I have a monthly payment with CHFA assistance?
- It depends on the type. Deferred assistance usually has no monthly payment until you sell or refinance. Repayable seconds include a payment. Forgivable options have no payments and may reduce over time if you meet occupancy requirements.
What happens to CHFA assistance if I sell or refinance?
- Deferred or repayable assistance commonly becomes due at sale or refinance. Forgivable options may be forgiven if you stay in the home long enough as your primary residence. Your lender will explain your exact payoff terms.
Can a seller help with costs when I use CHFA in Aurora?
- Seller concessions can typically cover certain closing costs within program limits. Sellers do not usually contribute directly to your down payment. Ask your lender to confirm allowed amounts for your loan type.
Can I combine CHFA assistance with other grants in Arapahoe County?
- Sometimes. Stacking rules apply, and your lender must confirm compatibility and recording order with any other assistance or credits.
Are condos and townhomes in Aurora eligible for CHFA assistance?
- Many condos and townhomes are eligible, but some condo projects require specific approvals. Verify property eligibility with your lender before you write an offer.
