Dealing with the Down Payment: Part 3

Our series for first-time homebuyers is all about understanding down payments in order to make smart, informed decisions when it’s time to buy. In the final edition of this three-part series, we’ll look at several programs that are available to assist homebuyers. With costs for housing continuing to rise and affordability decreasing along the Front Range, understanding these alternatives might open the door to buying a home.

Veteran’s Administration (VA)
To qualify, you must be an honorably discharged veteran of the US Armed Forces. This type of loan allows for up to 100 percent LTV, and in place of mortgage insurance requirements, the Veteran’s Administration guarantees a portion of the loan.

Federal Housing Administration (FHA)
This option requires as little as a 3.5 percent down payment, which can be in the form of gift funds. Mortgage insurance is required for the life of the loan, and both an upfront premium and monthly payments are required.

USDA Rural Housing
Designed to help low-income individuals and families purchase homes in rural areas, this option has income and property restrictions, and requires an approved lender.

Down Payment Assistance Programs
Programs are available through local city and county governments, and non-profit organizations. These programs often require homebuyer education classes and can be limited to first-time homebuyers.

Colorado Housing and Finance Authority (CHFA)
CHFA was created in 1973 to address the shortage of affordable housing in Colorado. It offers a variety of programs to lower required down payment and monthly mortgage insurance premiums. Income and purchase price limits are based on county.

House to Home Ownership Program (H2O)
This program provides down payment and closing cost assistance to borrowers purchasing property in the City of Boulder, with a maximum combined LTV of 105%. Requirements include being a first-time home buyer, meeting an income threshold, and working in Boulder city limits.

Learn about the basics of down payments and two standard down payment options in the first part of this series, and understand funds you can use for down payments in the second part. For more information, try out our mortgage affordability calculators, sign up for a complimentary seminar, or contact our mortgage team.

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