Special First Time Home Buyer Loan Programs Colorado
First Time Home Buyers Program for Colorado Residents
This week, I’m going to cover another first time home buyer topic that’s on your mind if you’re a first time home buyer and that is, are there any special first time home buyer loan programs? So, the short answer to that is yes, but there’s a couple of different types of first-time home buyer programs.
The first is there are programs out there to assist with your down payment and some of your closing costs, also called down payment assistance programs. The most common one in Colorado is called CHFA, which stands for Colorado Housing Finance Authority, and these entities CHFA and other entities, they provide assistance in the form of either a grant that doesn’t have to be repaid or they’ll put what’s called a silent second lien on your property for the amount of the assistance that they give you. So what I mean by silent is there’s no payment, no interest paid on the mortgage, but it does have to be repaid eventually if you go to refinance your property or if you sell it. Has to be repaid, but it’s given to you up front to help you get in the house. That’s one first time home buyer program is available.
And by the way, you do not have to be a first time home buyer to take advantage of down payment assistance programs but there are options for first-time home buyers within that realm of first time home buyer programs that non-first-timers cannot get, so that’s one thing you can do.
The second thing is loan programs, and there’s not nearly as many actual loans for first-time home buyers that there used to be. One of the most common ones is, and I don’t know if you guys know this watching this video, but you only need to have 3% down payment. If you’re a first time home buyer. There’s a common misconception out there that you have to have 20% down but there’s actually a 3% down payment program that’s designed for first time home buyers and you get better mortgage insurance. Anytime you put less than 20% down on a home, you have to pay mortgage insurance on your mortgage and the rate of the home of the mortgage insurance is lower on the 3% down payment program.
Now, for all these programs, you have to take a first-time home buyer course and get a certification for that to qualify for these. There’s another common first-time home buyer program that’s not just for first-time home buyers, but I wanted to mention it because it’s a common one for first-timers to get and that is FHA. This is another low down payment option 3.5% minimum down payment, and it’s good for if you maybe have some things on your credit so your credit score is not as good, maybe your debt to income ratio is a little bit high so you have a kind of a lot of debts, car payments, credit cards, and that kind of thing compared to your income. That’s what we call it, debt to income ratio, so if your debt to income ratio is a little bit high, FHA might be an option for you to look at. There’s just other reasons why FHA works well and a reason why a lot of first-timers go FHA for their first home loan. In fact, that’s what me and my wife had on our first home loan for quite a few years because of various factors. Really common one FHA, but you do not need a home buyer course certification for FHA.
Those are just the few first-time home buyer programs that are special to first-time home buyers and if you have any questions on that, what you qualify for, if these programs make sense for you or not, just give me a call in the office, text, or email me.
