A 2018 survey revealed that about 62% of millennials who want to buy their first homes don’t have enough money for the down payment. If you are among them, then here’s good news: You can apply for down payment assistance or simply DPA.
This program is created to help low to moderate income buyers by providing them with the money to cover a part of or the entire down payment amount required, whether it’s 3% or 20%. It is intended to transition people who are stuck renting into finally become owners of their dream homes.
Different banks and lenders offer different kinds of down payment assistance programs in Denver. That’s why it’s a good idea to shop around first before you pick a lender. Partnering with an experienced broker will also be a big help in finding and determining in the best program that meets your financial needs.
The lender is going to need to know your credit score, income, debt-income ratio, homeowner education class, qualification for a mortgage under a private lender, and whether the home you want to buy passes the safety and health standards of the US Department of Housing and Urban Development. You must understand that not all buyers qualify for down payment assistance in Colorado Springs. Thus, while looking for lenders, it’s a good idea to get ready with the necessary documents to qualify for the down payment assistance program.
Here are the general program requirements from CFHA or Colorado Federal Housing Administration:
- A credit score of 620 or higher
- Income that doesn’t exceed the CHFA’s income limits
- Attending an in-person or online CHFA-approved homebuyer education class (Note: the class must be completed by the buyer before closing the home loan)
- $1,000 financial contribution toward the purchase of the home
Currently, there are two types of financial assistance being offered by the CFHA. One is DPA and the other one is closing cost assistance. They also offer a down payment assistance grant that is up to 3% of your first mortgage.