Colorado buyers rarely get stuck on the monthly payment. They get stuck on the pile of cash needed to reach the closing table — and along the Front Range, where prices climbed faster than savings accounts did, that pile got big. The state's housing finance authority, CHFA, exists to bridge exactly that gap, and it does it two different ways: a grant you never repay, and a 0% second mortgage you repay later. Choosing between them is the whole game.
Two doors: grant or second mortgage
CHFA's down payment assistance comes in two forms, and they are not interchangeable:
| DPA Grant | DPA 0% Second Mortgage | |
|---|---|---|
| Maximum | 3% of the first mortgage amount, or $25,000 — whichever is less | 4% of the first mortgage amount, or $25,000 — whichever is less |
| Repayment | Never repaid | Repaid later (see below) |
| Interest rate | N/A | 0% |
| Monthly payment | None | None |
The grant is the simpler product: CHFA describes it as non-repayable, full stop. The second mortgage is larger — 4% instead of 3% — but it is a real lien that comes due eventually.
Two wrinkles worth knowing. First, CHFA rounds down to whole dollars: 3% of a $394,890 first mortgage is $11,846.70, so the grant is $11,846. Second, the $25,000 cap bites on larger loans — CHFA's own example notes that 4% of a $650,000 first mortgage would be $26,000, so the second mortgage is capped at $25,000.
There's also a meaningful exception: on CHFA's FirstGeneration and HomeAccess loan programs, the full $25,000 second mortgage is available regardless of the first mortgage amount.
When the second mortgage comes due
The 0% second is a deferred, "silent" lien — no monthly payment, no accruing interest. CHFA lists the events that make it due and payable in full:
- Maturity of the first mortgage (it's structured as a balloon)
- Sale of the property
- Refinance of the first mortgage
- Default on the first mortgage
- The property ceasing to be your primary residence
One useful detail for anyone thinking ahead: if you refinance your first mortgage back to CHFA, the maturity date of the second mortgage does not change.
What the money can — and can't — do
Both the grant and the second mortgage can be applied to your down payment, closing costs, and prepaids. CHFA is specific about what they cannot cover:
- Paying off the borrower's other debts
- The difference between appraised value and sales price
- The $1,000 minimum borrower contribution — you bring that yourself
- Funding a repair escrow account
- Reducing the loan amount below the maximum for the county or area
That $1,000 figure is the one people miss. CHFA assistance is generous, but it is not a zero-dollar path to the closing table.
If your assistance exceeds what you need, the leftover has somewhere to go — more down payment, a single-paid mortgage insurance premium, principal reduction on the first mortgage (CHFA sets no cap), real estate commissions, or a lower loan amount. What it can't do is come back to you: excess funds cannot go to the borrower as cash back.
What this looks like in Colorado numbers
Illustrations of the formula, not quotes:
- Denver: on a $500,000 first mortgage, the grant is up to $15,000; the second mortgage is up to $20,000.
- Colorado Springs or Northern Colorado: on a $425,000 first mortgage, the grant is up to $12,750; the second mortgage is up to $17,000.
- Grand Junction: on a $350,000 first mortgage, the grant is up to $10,500; the second mortgage is up to $14,000.
Your actual figures depend on your loan amount, program, and CHFA's terms at the time you lock.
Grant or second mortgage — how to think about it
The extra 1% is real money, so the trade is straightforward: take the larger second mortgage if you need the cash now and plan to stay, because a 0% deferred lien costs you nothing month to month. Take the grant if you value a clean title and want no lien behind your first mortgage, particularly if there's any chance you'll sell or refinance in the near term — the second mortgage comes due in both of those events, and the grant never does.
Note that CHFA pairs its assistance with its own first-mortgage programs — FirstStep, SmartStep, HomeAccess, and FirstGeneration — through CHFA-participating lenders. This isn't assistance you bolt onto any loan from any lender.
Local programs can layer on top
Several Colorado cities, counties, and housing authorities run their own assistance programs alongside CHFA's, and they open and close as funding cycles allow. A loan officer who works these programs regularly will know what is actually funded and available in your county right now — which is a very different question from what a program's website says.
Sources
- CHFA Down Payment Assistance (program overview)
- CHFA down payment assistance program requirements (grant and second-mortgage terms, caps, eligible uses, repayment triggers)
- CHFA Homeownership (first-mortgage programs, participating lenders); CHFA homeownership line: (888) 320-3688
Program terms are set by CHFA and change without notice; figures above are current as of August 2026. Credit score, income, and purchase price limits apply and vary by program and county — confirm current requirements with CHFA or a participating lender. This is general information, not a loan offer, a commitment to lend, or financial advice. Talk to a CHFA-participating Xpert loan officer to confirm current terms and your eligibility.