First-Time Buyer Programs in Denver Explained

Saving for a down payment in Denver can feel like the toughest part of buying your first home. You might be wondering if there is real help available and how it actually works. The good news is Denver buyers have access to statewide and local programs that can reduce your upfront costs and keep your timeline on track. In this guide, you’ll learn what down payment assistance is, which Denver-area programs to explore, how eligibility works, and how these programs affect your monthly payment and closing schedule. Let’s dive in.

What down payment assistance is

Down payment assistance, often called DPA, helps cover a portion of your down payment and sometimes your closing costs. You will typically see one of these structures:

• Forgivable grants that require no monthly payment and are forgiven after you live in the home for a set period.
• Deferred second mortgages with no monthly payment that are repaid when you sell, refinance, or reach a term.
• Fixed-rate subordinate loans that do have a monthly payment.
• Less common matched-savings programs.

Each program sets its own rules on forgiveness, interest, and repayment. Always confirm the exact terms with the program administrator and your lender before you apply.

Why DPA matters in Denver

Home prices in Denver are higher than national medians, which makes saving for a down payment a common hurdle. DPA can reduce the cash you need up front so you can compete sooner and focus on finding the right home. Keep in mind there are trade-offs. A second lien can affect a future refinance or sale, and program paperwork can add time to your transaction. Treat DPA as one tool alongside savings, gift funds, lender credits, and seller concessions.

Denver and Colorado programs to know

CHFA statewide options

The Colorado Housing and Finance Authority, or CHFA, provides mortgage products with down payment and closing cost assistance through participating lenders across Colorado. Expect program-specific income and purchase price limits, a primary residence requirement, and a required homebuyer education course.

metro-area DPA products

You may hear about metroDPA and similar local programs that operate across the Denver metro. These often provide assistance as a percentage of the purchase price or a flat amount, with forgiveness tied to how long you live in the home. Availability and terms change, so verify details with the current program administrator and a participating lender.

City and County of Denver initiatives

The City and County of Denver periodically sponsors homebuyer assistance or partners with community groups on targeted programs. Check the city’s housing department for current offerings, eligibility rules, and application steps.

Federal loan compatibility

Many DPAs can be paired with FHA, VA, or USDA loans, subject to each program’s rules. FHA allows gift funds and many DPA sources. VA buyers may use certain assistance programs. Always confirm compatibility with your lender and the DPA sponsor before you write an offer.

Lender and nonprofit programs

Community banks, credit unions, and nonprofit housing counselors sometimes offer their own assistance or favorable first-mortgage terms for first-time buyers. Most programs require you to work with a participating lender who knows the paperwork and timelines.

Eligibility basics and documents

Program rules vary, but you will commonly see these requirements:

• First-time buyer status defined as no homeownership in the past three years. Some programs list exceptions for veterans, single parents, or targeted areas.
• Household income limits tied to area median income.
• Purchase price limits or tract-specific boundaries.
• Minimum credit score and a minimum borrower contribution.
• Completion of an approved homebuyer education course.
• Primary residence and owner-occupancy for a set period.

Expect to provide income verification like pay stubs, W-2s, and tax returns, plus bank statements, ID, employment verification, the purchase contract and property address, and your homebuyer education certificate if required. Programs may also ask for affidavits or occupancy statements.

How DPA affects your payment

Down payment assistance can change your monthly costs and long-term obligations. Here is how:

• First mortgage amount. If DPA covers part of your down payment, your first-lien loan amount can be lower than it would be without assistance. That can reduce your principal and interest payment on the first mortgage.
• Second-lien obligations. If your assistance is a deferred second with no monthly payment, your cash flow may be similar to paying the down payment yourself, but you will still have a lien that may be due when you sell or refinance. If it is a repayable second, expect an added monthly payment.
• Mortgage insurance. On conventional loans, private mortgage insurance is based on the LTV of the first mortgage. If DPA helps you reach a lower LTV, you may reduce PMI. Many buyers still put 3 to 5 percent down, which often keeps PMI in place until you reach lower LTV thresholds.
• Taxes and qualifying. DPA funds are generally not taxable, but talk with a tax advisor. Lenders consider subordinate financing in your debt-to-income analysis, even if the second has no monthly payment in some underwriting models.

Refinance and sale impacts

Subordinate liens can require payoff or subordination if you refinance. Some programs include recapture or repayment triggers at sale. Ask your lender and program administrator for a clear explanation before you commit.

Timeline and what to expect

Adding assistance adds steps beyond standard underwriting. You will likely need a separate approval from the DPA administrator, extra forms, and sometimes compliance checks. Depending on the program and lender, DPA can add a few days to several weeks to your timeline. Start the conversation early at pre-approval so the paperwork does not delay closing.

A simple example

Imagine a $450,000 home where you plan a 3 percent down payment of $13,500. You have $5,000 saved, and a DPA provides $8,500 as a deferred second lien. Your first mortgage would reflect the lower balance because the assistance fills the gap. If the second has no monthly payment, your cash flow may look similar to paying the full down payment yourself, but you will still carry that second lien until it is forgiven or repaid. Actual savings depend on rates, PMI, and the DPA’s exact terms.

Your next steps in Denver

1. Get pre-approved with a lender experienced in Denver-area DPA and ask if they participate in CHFA and local programs.
2. Identify programs you may qualify for, including CHFA, metro-area products, city offerings, and lender or nonprofit options.
3. Complete required homebuyer education early. Many programs need a certificate before closing.
4. Assemble documents now and submit your DPA application as soon as you have a signed contract.
5. Review forgiveness timelines, repayment triggers, and refinance impacts with your lender, a housing counselor, or an attorney.
6. Use your pre-approval to compare monthly payments with and without assistance, including any second-lien payment if applicable.

Quick documents checklist

• Photo ID for all borrowers
• Last 30 days of pay stubs and most recent W-2s and tax returns
• Two to three months of bank statements
• Purchase contract and property address
• Homebuyer education certificate, if required
• Program-specific affidavits or occupancy forms

Work with a participating lender

Most assistance programs require a participating lender who can underwrite both the first mortgage and the DPA. Ask lenders directly which programs they handle and how many DPA closings they complete each month. This experience can shorten timelines and reduce surprises.

Ready to find a smart path to your first home in Denver? Let’s talk through your budget, timeline, and which programs fit your goals. Reach out to Johnny Lee to map your options and move forward with confidence.

FAQs

What is down payment assistance for Denver buyers?

• It is funding that helps cover your down payment and sometimes closing costs, often as a grant, deferred second mortgage, or repayable second, each with its own rules.

Which Denver programs should first-time buyers consider?

• Start with CHFA’s statewide options, then look at metro-area products like metroDPA, city initiatives, and lender or nonprofit programs that serve first-time buyers.

Who qualifies as a first-time buyer for assistance?

• Many programs define first-time as not owning a home in the past three years, with possible exceptions for veterans, single parents, or purchases in targeted areas.

Can I combine DPA with FHA, VA, or USDA loans?

• Often yes, but it depends on each program’s rules. Confirm compatibility with your lender and the assistance provider before you make an offer.

Will DPA add another monthly payment?

• It depends on the structure. Forgivable or deferred seconds may have no monthly payment, while repayable seconds usually add a payment.

How does DPA affect PMI on conventional loans?

• PMI is based on the first mortgage LTV. If assistance lowers your LTV enough, PMI may drop, but many buyers still have PMI with low down payments.

Will DPA slow down my closing?

• It can add extra approval steps and paperwork that may take a few days to several weeks. Start early at pre-approval to keep your timeline on track.

Do I have to use a specific lender for assistance?

• Most programs require a participating lender. Ask potential lenders which DPA programs they handle and how the application process works.