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Down payment assistance

How down payment assistance works for Colorado home buyers

By Lorrie Haran, Mortgage Loan Officer · NMLS #1333991 · October 7, 2026

Down payment assistance helps cover your down payment or closing costs. In Colorado it is offered through state and local programs, and it can arrive as a grant, a second loan, or a deferred amount. Eligibility usually depends on your income, location, credit, and whether you are a first-time buyer, and programs change often.

What it is

Down payment assistance (DPA) is money from a government or nonprofit program that reduces what you need to bring to closing. It is designed to help buyers who have good credit and steady income but have not saved a large down payment.

The three common forms

  • Grants that you do not repay.
  • Second loans that sit behind your main mortgage, sometimes with a monthly payment and sometimes interest-free.
  • Deferred or forgivable loans that you repay when you sell, refinance, or after a set number of years.

Each form affects your long-term costs differently, so the "free money" label can be misleading. Ask what happens if you sell in three years versus ten.

Who offers it in Colorado

Programs are run by state and local organizations. Well-known names include the Colorado Housing and Finance Authority (CHFA) and the metroDPA program in the Denver area, and some cities and counties have their own. Each has its own rules, funding, and lender requirements.

What usually matters for eligibility

  • Household income compared to a limit for your county and household size
  • Purchase price limits
  • Credit score and debt ratios
  • First-time buyer status, which each program defines differently
  • A homebuyer education course

Questions to ask before you apply

  1. Is this a grant, a second loan, or deferred?
  2. What happens if I sell or refinance early?
  3. Does the program require a specific lender or loan type?
  4. Can it be combined with anything else?
  5. Is funding available right now?

Program details and funding change often. Use this guide as a map, then confirm current terms with a loan officer and the program itself. Our down payment help page has more, and the FAQ covers common questions.

Common questions

Do I have to repay down payment assistance?

It depends on the program. Some are grants, some are second loans with monthly payments, and some are deferred until you sell or refinance. Always ask for the exact repayment terms in writing.

Can I combine down payment assistance with other programs?

Sometimes. Whether two programs can be combined depends on the loan type and each program's rules. Ask before you make an offer, not after.