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CHFA loans and down-payment assistance

Compare the CHFA grant with the silent second—not just the assistance amount.

Denver Lending helps homebuyers understand CHFA loan eligibility and compare assistance that does not require repayment with a larger zero-interest deferred second mortgage. The better choice depends on the first-mortgage pricing, monthly payment, cash needed, and expected time in the home.

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The direct answer

A CHFA loan is a first mortgage made through an approved lender. Eligible buyers may pair it with a grant or deferred second mortgage for down payment and closing costs.

Up to 3%Current CHFA grant percentage, subject to the applicable cap
No repaymentThe grant is not secured by a lien
Up to 4%Current deferred-second percentage, subject to the applicable cap
0% interestThe silent second has no scheduled monthly payment but must be repaid

CHFA eligibility at a glance

Start with the borrower, property, and complete first mortgage.

CHFA lists several general purchase requirements: a qualifying borrower typically needs a mid-credit score of at least 620, income within the selected program's limit, individual completion of CHFA-approved homebuyer education before closing, and a minimum $1,000 financial contribution. The first-mortgage program and its underwriting rules still apply, and some CHFA products have additional requirements.

  • Income must fit the current program limit
  • Homebuyer education is required before purchase closing
  • The buyer must make the required minimum contribution
  • The borrower, occupancy, and property must satisfy the selected loan program

Primary guidance: CHFA — How to Get a CHFA Loan.

How an eligible buyer obtains the CHFA grant

The most common grant path is CHFA SmartStep Plus. A participating lender first confirms that the borrower, property, and FHA, VA, or USDA first mortgage meet the applicable requirements. The borrower completes CHFA-approved homebuyer education and provides the required financial contribution. The lender then locks the CHFA first mortgage with the grant option and provides the grant funds at closing on CHFA's behalf.

The grant may be used for eligible down payment, closing costs, prepaids, principal reduction, or a permanent interest-rate buydown. It cannot be used for the minimum borrower contribution, debt payoff, escrow repairs, or an appraisal gap.

Grant or deferred second?

Compare the extra cash today with the cost over time.

Current CHFA guidance allows the grant to provide up to the lesser of 3% of the first mortgage or $25,000. The silent second may provide up to the lesser of 4% or $25,000. That additional assistance can matter when the buyer needs more cash for the transaction, but the second mortgage remains repayable.

CHFA grant

Up to the lesser of 3% of the first mortgage or $25,000 under an eligible grant program. It does not require repayment and is not secured by a lien.

CHFA silent second

Up to the lesser of 4% of the first mortgage or $25,000 under applicable programs. It has no interest or scheduled monthly payment, but the balance must be repaid after specified events.

CHFA states that higher first-mortgage interest rates apply when using its down-payment-assistance options. Denver Lending therefore compares the daily note rate, payment, cash to close, assistance amount, repayment obligation, and estimated cost over the buyer's likely timeframe—including a non-CHFA option when appropriate.

Primary guidance: CHFA down-payment-assistance options.

A straightforward process

How to explore a CHFA loan through Denver Lending.

  1. 1

    Review the complete scenario

    Start with income, credit, debts, available funds, occupancy, property plans, and a comfortable payment range.

  2. 2

    Confirm the eligible CHFA path

    Denver Lending checks the current program requirements and confirms an available CHFA-approved wholesale lending channel for the transaction.

  3. 3

    Compare assistance and first-mortgage cost

    Review the grant, deferred second, and suitable non-CHFA alternatives side by side instead of choosing on assistance alone.

  4. 4

    Complete education and underwriting

    Finish the required CHFA-approved class and provide the documents needed for the selected lender to approve and close the loan.

CHFA confirms that mortgage brokers may originate its programs through an approved wholesale relationship. See CHFA's mortgage-broker guidance.

Not every CHFA mortgage includes a grant

CHFA currently makes the grant available only through SmartStep Plus and SectionEight Homeownership Plus. Conventional CHFA programs may pair the first mortgage with a deferred second instead. SmartStep Plus is not restricted to first-time homebuyers, although all borrower and program requirements still apply.

Review the current details in the CHFA SmartStep Plus program matrix and CHFA's Seller's Guide.

CHFA assistance questions

Understand the qualification and repayment details.

What is a CHFA loan?+

A CHFA loan is a home mortgage made by an approved participating lender under a Colorado Housing and Finance Authority program. Depending on the program, an eligible buyer may pair the first mortgage with a CHFA grant or deferred second mortgage for down payment and/or closing costs. CHFA does not lend directly to consumers.

How does someone get a CHFA down-payment-assistance grant?+

An eligible buyer works with a CHFA participating lender that locks the appropriate CHFA first mortgage and grant option. The grant is available only with specified CHFA programs, including SmartStep Plus and SectionEight Homeownership Plus. The borrower must satisfy the selected program's income, credit, debt-to-income, education, occupancy, property, and minimum-contribution requirements.

What is the difference between the CHFA grant and silent second mortgage?+

Under current CHFA guidance, the grant may provide up to the lesser of 3% of the first mortgage or $25,000 and does not have to be repaid. The zero-interest deferred second may provide up to the lesser of 4% or $25,000 but remains a debt that generally becomes due after specified events such as sale, refinance, payoff, maturity, or the home no longer being the borrower's primary residence.

Is the CHFA grant available with a conventional mortgage?+

CHFA currently limits its grant to SmartStep Plus and SectionEight Homeownership Plus. Those programs use eligible FHA, VA, and/or USDA financing rather than a conventional first mortgage. CHFA conventional programs may offer a deferred second mortgage instead, subject to current requirements.

Does someone have to be a first-time buyer for the CHFA grant?+

Not when using CHFA SmartStep Plus, which is not restricted to first-time homebuyers. SectionEight Homeownership Plus has separate eligibility rules. The selected program and first mortgage determine the requirements.

Can CHFA assistance cover closing costs?+

Eligible CHFA grant or second-mortgage proceeds may generally be used for down payment, closing costs, prepaids, principal reduction, or an eligible permanent interest-rate buydown. They cannot replace CHFA's required borrower contribution, pay off debt, fund escrow repairs, or cover an appraisal gap.

Can a mortgage broker help with a CHFA loan?+

Yes. CHFA permits mortgage brokers to participate through a wholesale relationship with a CHFA participating lender that is approved to accept third-party originations. Denver Lending can review the scenario and confirm whether an eligible CHFA wholesale channel and program are available for the transaction.

Compare both paths

Find out whether the grant or silent second fits better.

We'll review eligibility, current first-mortgage pricing, monthly payment, cash needed, and the long-term repayment tradeoff.

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