The biggest myth in real estate is that you need 20% down to buy a home. In Colorado, first-time buyers often get in with a fraction of that — sometimes very little out of pocket — thanks to state and federal programs most people don't know exist. Here's the 2026 rundown.
The short version
You likely need far less down than you think. Between FHA (3.5% down), low-down conventional loans (as little as 3%), and CHFA down payment assistance, qualified Colorado buyers can often purchase with minimal cash. The key is getting matched to the right program early.
1. CHFA — the Colorado Housing and Finance Authority
CHFA is the cornerstone of first-time buyer help in Colorado. It's a state authority that works through approved lenders to offer affordable mortgages plus down payment assistance (DPA) — often structured as a grant or a low-cost second loan that covers much of your down payment and closing costs. CHFA programs generally include:
- Competitive fixed-rate first mortgages for first-time and moderate-income buyers
- Down payment / closing-cost assistance to reduce your cash-to-close
- A required homebuyer education course (free or low-cost, and genuinely useful)
- Income and purchase-price limits that vary by county
Because terms, rates, and limits change, the right move is to talk to a CHFA-approved lender — I can connect you with one I trust who will tell you exactly what you qualify for, at no cost.
The main CHFA programs
CHFA assistance comes through a few named programs — your lender matches you to the one that fits:
- CHFA FirstStep / FirstStep Plus — an FHA-backed loan for first-time buyers (and buyers in targeted areas); the "Plus" version adds down payment assistance.
- CHFA SmartStep / SmartStep Plus — the conventional-loan counterpart, and not limited to first-time buyers, with optional assistance.
- CHFA Preferred — a conventional option built to keep mortgage insurance lower for eligible buyers.
- CHFA HomeAccess — extra assistance for buyers who have a disability, or who have a household member with a disability.
How the down payment assistance is structured
CHFA's DPA usually comes in one of two forms, and which one you get matters:
- A grant — a set percentage of your first mortgage that you do not pay back.
- A "silent second" — a second loan with no monthly payment that sits quietly behind your main mortgage and is typically repaid only when you sell, refinance, or pay off the home.
Both lower your cash to close. The grant costs you nothing later; the silent second has to be repaid eventually but frees up cash now — a CHFA-approved lender will walk you through the trade-off for your situation.
CHFA income and price limits
CHFA programs carry income limits and home-price limits that vary by county and by program, and they're updated periodically. Most metro-Denver buyers within typical first-time-buyer budgets fall under them — but the only way to know your exact numbers is to run them with a lender. Limits change, so anything you read (here or anywhere) should be verified against current CHFA figures.
2. FHA loans — low down payment, flexible credit
FHA loans are federally backed and popular with first-time buyers because they allow as little as 3.5% down and are more forgiving on credit scores. They pair well with CHFA assistance, which can help cover that 3.5%.
3. Conventional low-down-payment loans
Programs like Fannie Mae's HomeReady and Freddie Mac's Home Possible allow qualified buyers to put down as little as 3%, often with reduced mortgage insurance. For buyers with solid credit, these can be cheaper long-term than FHA.
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Living in Thornton →Moving to Thornton →Cost of Living in Thornton →Best Thornton Neighborhoods →All guides →4. VA & USDA loans
- VA loans — for eligible veterans and service members: often 0% down, no monthly mortgage insurance. One of the best deals in lending.
- USDA loans — 0% down for eligible homes in designated rural areas (some communities on the metro fringe qualify).
5. Local & metro down payment programs
Beyond CHFA, city, county, and nonprofit programs add another layer of help — and some can stack on top of CHFA. The ones Colorado buyers ask about most:
- metroDPA — the metro Denver Down Payment Assistance program, run through the City and County of Denver, offers help as a percentage of your loan to buyers across much of the metro. It has income limits but is not restricted to first-time buyers.
- Colorado First-Generation Homebuyer Assistance — a state program aimed at buyers who are the first in their family to own a home (neither parent currently owns). It's funded in limited rounds, so availability and exact terms change — worth asking about while funds last.
- Local programs by region — most Colorado metros run their own assistance on top of CHFA (for example, El Paso County / Colorado Springs and Mesa County / Grand Junction have their own down payment programs). Buying outside Denver? Ask which local options apply.
Because these are funded in cycles and can run out, timing matters — another reason to start the conversation early. For more on the cash you'll actually need, see my guide to the down payment for a house in Colorado, and if you're weighing where to buy, the best Denver suburbs for first-time buyers.
How to actually use these (the order that works)
- Get pre-approved with a CHFA-approved lender first. This tells you your true budget and which programs fit — before you fall in love with a house.
- Complete the homebuyer education course if your program requires it.
- Shop with an agent who knows these programs so your offers are structured to work with assistance (some sellers need education on how DPA offers close — that's my job).
- Close — often with far less cash than you expected.
Use the free 60-second checker — answer 6 quick questions and instantly see which Colorado programs fit your situation. No signup needed.
Check my programs instantly →Frequently asked questions
What is CHFA in Colorado?
The Colorado Housing and Finance Authority — it partners with approved lenders to offer affordable mortgages and down payment assistance, with a focus on first-time and moderate-income buyers.
Do you have to be a first-time buyer to get down payment assistance?
Not always. Many programs are open to repeat buyers, and "first-time" usually means you haven't owned in the past three years. A CHFA-approved lender can confirm your eligibility.
How much down payment do you need in Colorado?
Less than most people think — as little as 3.5% with FHA, 3% with some conventional loans, or near-zero with VA, and CHFA assistance can help cover much of that.
What is metroDPA?
metroDPA is the metro Denver Down Payment Assistance program, offered through the City and County of Denver. It provides help as a percentage of your loan amount, has income limits, and — unlike some programs — isn't limited to first-time buyers. It can sometimes be combined with other assistance.
Is there a Colorado first-generation homebuyer program?
Yes. Colorado has a First-Generation Homebuyer down payment assistance program for buyers whose parents don't currently own a home. It's funded in limited rounds with its own income limits, so availability changes — ask a lender whether funds are currently open.
What is a "silent second" in down payment assistance?
It's a second loan used to cover your down payment that has no monthly payment. It sits behind your main mortgage and is usually repaid only when you sell, refinance, or pay off the home — which lets you buy with less cash today.
Is there a first-time home buyer tax credit in Colorado?
There's no simple cash "tax credit" check, but qualified buyers may be able to use a Mortgage Credit Certificate (MCC), which turns part of your annual mortgage interest into a federal tax credit. MCC availability varies and isn't always offered, so confirm current options with a CHFA-approved lender.