In my previous 2 Blogs on DPA, I discussed and tried to dispel some of the myths surrounding down payment assistance. In addition, I highlighted some of the key factors in determining what it takes to qualify for DPA. Today, I will address who are the agencies out there who offer DPA and how doing a little research can help in deciding which program you should consider and how to find out if your lender works with that agency.
If you go to HUD’s website and search for down payment assistance, you will find that there are over 30 different state, county, and city agencies out there offering DPA programs out there for first time home buyers (http://www.hud.gov/local/co/homeownership). Most of them are geographic specific (city and county) with a few of them being statewide. So understanding where you believe you want to live is absolutely critical determining what agency and program you should use. Let’s say for example you want to purchase a home in Denver that happens to be in Adams County. In this scenario, you could potentially use the following three different agencies/programs (CHFA, CHAC, and Adams County). Working with a lender that knows the subtle differences between the programs is paramount and will save you a small fortune in interest payments over the life of the loan.
Once of the best ALL AROUND programs is Colorado Housing and Finance Authority (CHFA). It is a statewide program that offers multiple programs and options for first time home buyers. It serves the entire State of Colorado and never runs out of money. It has the highest income limits for first-time buyers and some very accommodating credit requirements (FICO scores down to 580). They offer homebuyer education (both online and classroom) and the administrators to the Mortgage Credit Certificate Program (MCC) where first-time buyers can “supercharge” their federal tax savings by taking a 20% “interest tax credit” on their tax return.
Check out CHFA’s website at www.chfainfo.com. Great programs offer by CHFA and you can find a list of approved CHFA lenders on the website as well.
