FHA Loan Down Payment Assistance
What these programs cover, what they cost you, and who qualifies
FHA loans require just 3.5% down.
But for many buyers, that number is still out of reach.
Down payment assistance programs exist to cover part or all of that gap.
This guide is for first-time buyers in Colorado and Florida who want to know how these programs actually work.
By the end, you will know what each program type involves, who qualifies, and where the trade-offs are.
In This Article
How FHA Loan Down Payment Assistance Works
FHA loan down payment assistance is money from a third party that covers some or all of your FHA down payment. The funds come from a state housing agency, a local government, or an approved nonprofit. These programs are not workarounds or obscure loopholes. They are established, government-compatible programs built to help creditworthy buyers who have stable income but limited savings. You can read about how FHA loans work to understand the base loan before factoring in any assistance.
FHA is the most commonly paired loan type with down payment assistance, and there is a practical reason for that. FHA’s flexible credit requirements and lower down payment floor already appeal to buyers who are cash-light. Adding DPA on top removes the final barrier between qualifying on paper and actually getting to closing. According to HUD’s FY2025 Annual Report, more than 83 percent of all FHA forward purchase mortgages went to first-time homebuyers. That number tells you who these programs are designed for and how widely they are actually used.
The assistance itself comes in several structures. Each has different repayment conditions, different effects on your monthly payment, and different implications if you sell or refinance before a certain period has passed. Understanding the structure before you apply matters more than most buyers realize.
Types of Down Payment Assistance Programs That Pair with FHA Loans
The four most common DPA structures are grants, forgivable second mortgages, deferred-payment second mortgages, and repayable second mortgages. They are not equivalent. The type you receive affects your monthly payment, your refinancing options, and what happens if your plans change.
| Program Type | How It Works | Repayment | Monthly Payment Impact |
|---|---|---|---|
| Grant | A gift of funds. No lien placed on the property. | None | None |
| Forgivable Second Mortgage | Balance forgiven after a set period, typically 5 to 10 years, if the home stays your primary residence. | Only if you sell, refinance, or move before the forgiveness period ends. | Usually none during the forgiveness period. |
| Deferred Second Mortgage | No monthly payments. Balance due when you sell, refinance, or pay off your first mortgage. | Yes, at sale or payoff. | None. |
| Repayable Second Mortgage | Regular monthly payments, often at a low or zero interest rate. | Yes, monthly. | Adds to your monthly payment. |
Grants are the most favorable option. No lien, no repayment, no residency condition attached. But they are also the least common and tend to carry stricter eligibility requirements or lower funding amounts.
Forgivable second mortgages are what you will see most often through state housing agencies like CHFA in Colorado and Florida Housing in Florida. The loan balance is reduced or eliminated over time, as long as the home stays your primary residence for the required period. If you sell, refinance, or move out early, you may owe part or all of the balance back. “Forgivable” does not mean unconditional. Read the specific program terms before you close.
Deferred second mortgages are common in both states. They carry no monthly payments, so your housing cost stays close to what it would be with just the FHA loan alone. The balance simply sits in the background until you sell or pay off the first mortgage. Repayable second mortgages do add to your monthly payment, but they can still make sense if the alternative is a down payment you cannot fund on your own.
Who Qualifies for FHA Down Payment Assistance
Most DPA programs share a common set of requirements across income, credit, first-time buyer status, education, and property use. The specifics vary by program, but the structure is consistent enough that understanding the framework gives you a clear starting point.
Income Limits
Most programs cap household income at a percentage of the area median income, typically between 80% and 115% AMI. In practice, those caps are often higher than buyers expect. A household earning $90,000 or more can qualify in many Colorado and Florida counties, depending on household size and program. CHFA sets income limits by county and household size in Colorado, so a family buying in Denver faces a different cap than the same family buying in Pueblo. Checking your specific county limit is a necessary step, not an optional one.
First-Time Buyer Status
Most DPA programs require you to be a first-time homebuyer. But the definition is more flexible than it sounds. Under most program guidelines, a first-time buyer is anyone who has not owned a home in the past three years. If you owned a home five years ago and have been renting since, you likely qualify. We regularly work with buyers who assume prior homeownership disqualifies them. In most cases, it does not.
“Most buyers who come to us convinced they won’t qualify for down payment assistance are wrong. The income limits are higher than people expect, and the first-time buyer definition covers anyone who hasn’t owned in three years. That describes a lot of people who think the door is already closed.”
— Reed Letson, Owner, Elevation Mortgage
Credit Score Requirements
FHA requires a minimum 580 credit score for the 3.5% down payment option. Most DPA programs set their own floor slightly higher. CHFA in Colorado requires at least 620. Florida’s Hometown Heroes program requires 640 for FHA-backed loans. A score between 580 and the DPA program’s minimum may still qualify for an FHA loan on its own, but the assistance layer won’t be available until your score meets the program’s specific threshold.
Homebuyer Education
Most DPA programs require a HUD-approved homebuyer education course before closing. CHFA requires completion through an approved Colorado provider. Florida Housing programs have the same requirement. These are available online and typically take a few hours. Completing the course early in the process avoids a last-minute delay, since some programs won’t move forward without the completion certificate in hand.
Property Requirements
The home must be your primary residence. No DPA program covers investment properties or second homes. Many programs also cap the purchase price by county, often tied directly to the FHA loan limit for that area.
What This Means for Your Situation
Whether a DPA program is available to you depends on your county, household income, and credit score — not just one of those. A buyer at 90% AMI in El Paso County may qualify for CHFA assistance that the same buyer in a different county does not. And a 618 credit score might work for FHA on its own while keeping you just outside the CHFA eligibility range. Getting a clear read on your specific numbers before applying saves time and sets realistic expectations from the start.
Run the Numbers Before You Start Shopping
Our first-time buyer tools let you estimate your payment, check affordability based on your income, and compare loan options side by side — before you ever talk to a lender.
Open the First-Time Buyer ToolsHow FHA Loan Limits Affect Your Program’s Purchase Price Cap
Most DPA programs set a maximum purchase price for the home you can buy. Many tie that cap directly to the FHA loan limit for your county. That means your county’s 2026 FHA limit affects not just how much you can borrow, but whether a specific program applies to the home you have in mind.
In Colorado, limits vary considerably. The 2026 FHA loan limit for a single-family home in El Paso County is $541,650. In Denver, Adams, and Arapahoe Counties, that limit rises to $862,500. Mountain resort counties like Eagle, Garfield, and Pitkin are capped at $1,249,125. In Florida, most counties sit at the FHA floor. Monroe County is an exception at $990,150. Broward, Miami-Dade, and Palm Beach Counties are set at $667,000 for a single-family home in 2026.
Use the lookup tools below to find the FHA limit for your county before you start shopping.
| Property Type | 2026 FHA Limit |
|---|
Florida FHA Loan Limits (2026)
| Property Type | 2026 Loan Limit |
|---|
FHA Down Payment Assistance Programs in Colorado and Florida
Colorado: CHFA
The Colorado Housing and Finance Authority (CHFA) runs the primary statewide DPA programs for FHA borrowers in Colorado, and they are available through participating lenders across the state. CHFA offers two options, and borrowers can choose one but not both.
The first is a grant covering up to 3% of your first mortgage loan amount. It requires no repayment and places no lien on the property. The second is a deferred second mortgage covering up to 4% of the first mortgage loan amount. No monthly payments are required, but the balance is due when you sell, refinance, or pay off your first mortgage. Both options require a minimum 620 credit score and completion of a CHFA-approved homebuyer education course. Both also require a minimum $1,000 contribution from the buyer, which can come from a gift but cannot come from the assistance program itself.
That $1,000 minimum contribution is worth knowing before you start. Buyers who expect to put in $0 from their own funds are sometimes surprised by this requirement. The amount is modest, but the rule is firm. Colorado’s median home price reached $593,800 in late 2025, according to Redfin, which means even a modest contribution is a real number to plan for. Working with a Colorado mortgage broker who participates in CHFA programs regularly can make a meaningful difference in how smoothly the process runs, since CHFA has specific submission and timing requirements that not every lender handles the same way.
Florida: Florida Housing
Florida Housing Finance Corporation administers several statewide programs. The most generous is Hometown Heroes, which provides up to $35,000, capped at 5% of the first mortgage loan amount, as a 0% interest deferred second mortgage. No monthly payment is required, and the balance comes due at sale, transfer, or refinance. Hometown Heroes is available to income-qualified first-time buyers who work full-time for a Florida employer in one of more than 50 eligible professions, including teachers, nurses, law enforcement, and firefighters.
One real limitation: Hometown Heroes funding is allocated by the state each year, and past rounds have depleted within weeks of opening. Getting pre-approved before the next funding round opens is the only reliable way to be positioned to use the program when it becomes available.
For buyers who do not qualify for Hometown Heroes, Florida Assist provides a deferred second mortgage at 0% interest with no monthly payments. The balance is due at sale, refinance, or payoff. Eligibility is broader since it does not require a specific occupation. A Florida mortgage broker who handles Florida Housing programs regularly can tell you which program fits your situation and whether funding is currently available.
A Colorado Springs Buyer Who Almost Talked Herself Out of It
A single mom was renting in Colorado Springs and had been saving for over a year. She had $4,500 set aside, a 628 credit score, and a household income of around $78,000. She assumed she earned too much for any assistance program and that her savings weren’t enough to cover both a down payment and closing costs on a home in El Paso County. Her plan was to wait another year and keep saving.
When she connected with us, we ran her numbers against CHFA’s 2026 income limits for El Paso County. The limit for a 1–2 person household is $124,600. She was well under it. Using CHFA’s DPA grant, we covered 3% of the first mortgage loan amount. A seller concession handled most of her closing costs. She closed with the $1,000 CHFA minimum contribution from her own funds and kept the rest of her savings intact as a cash reserve. The home she bought was listed at $310,000. The extra year of renting would have cost her more than the assistance she received.
Trade-Offs to Understand Before You Commit
DPA programs offer real financial help, but each one comes with conditions. Understanding these before you close is far easier than discovering them afterward.
Rate impact. Some DPA programs are funded through mortgage revenue bonds, and the interest rate on your FHA first mortgage may run slightly above the open market as a result. A difference of 0.25% to 0.50% sounds small, but over 30 years it changes the total cost of the loan. Compare the upfront cash you receive against the extra interest you will pay over the time you expect to stay in the home. The math often favors the DPA program, but it is worth running before you close.
Residency conditions. Forgivable loans require the home to remain your primary residence for the full forgiveness period. If you sell or refinance before that period is up, you may owe part or all of the balance back. For buyers who plan to stay long-term, this is not a concern. For buyers with a reasonable chance of moving within five years, a forgivable structure may not be the right fit.
Refinancing complications. A DPA second mortgage is a recorded lien on your property. If you want to refinance your first mortgage later, the DPA servicer may need to agree to stay in second position, a process called subordination. Some programs handle this without issue. Others have restrictions that can delay or block a refinance entirely. This is a question to ask before you choose a program, not after you close. Knowing whether subordination is permitted, and under what conditions, is one of the details where working with a lender who has processed these loans before makes a genuine difference — not because it is complicated in theory, but because it comes up in real transactions in ways that catch people off guard.
Lender participation. Not every lender offers every DPA program. CHFA and Florida Housing require approved lender participation, and lenders who process these loans regularly move faster and submit fewer errors than those who handle them occasionally. If your current lender does not participate in the program you want, you may need to choose between the two.
Comparing your available loan program options alongside DPA choices gives you the clearest picture of what makes sense. A VA loan, for instance, comes with no down payment and no second lien at all, which may work better for eligible borrowers than a DPA-paired FHA loan.
Run the Numbers Before You Start Shopping
Our first-time buyer tools let you estimate your payment, check affordability based on your income, and compare loan options side by side — before you ever talk to a lender.
Open the First-Time Buyer ToolsCommon Mistakes to Avoid
Assuming Your Income Is Too High
Many buyers disqualify themselves before looking up the actual limits. In many Colorado and Florida counties, households earning $90,000 or more can qualify for assistance depending on household size and program. Check the income cap for your specific county before assuming DPA is not available to you.
Starting with a Lender Who Doesn’t Participate in the Program
Buyers who choose a lender first and discover that lender doesn’t participate in CHFA or Florida Housing programs lose time, sometimes lose rate locks, and occasionally lose access to the program entirely if funding is limited. Confirming lender participation before the process moves forward is one of the first questions worth asking.
Not Asking About Refinance Restrictions Before Closing
Some DPA programs require the servicer’s approval before you can refinance your first mortgage. Buyers who don’t ask about this at the start find out when they are trying to refinance two years later — which is a worse time to find out. This question belongs at the very beginning of the conversation, not at the end.
Questions to Ask Your Lender
- Are you an approved participant in CHFA or Florida Housing programs? Which specific DPA programs do you offer?
- Will using a DPA program affect my FHA interest rate? If so, by how much, and what does that cost me over the life of the loan?
- What are the residency requirements for this program, and what happens if I sell or refinance before the forgiveness or deferral period ends?
- Does this program allow subordination if I want to refinance my first mortgage later? Are there any restrictions on that?
- What is the minimum I need to contribute from my own funds, and can that amount come from a gift?
- Can I combine this DPA program with a seller concession to further reduce my cash at closing?
20% Down Is Not the Only Option
Most buyers assume they need more saved than they actually do. Our down payment guide covers every real option available including programs most buyers never hear about.
See Your Down Payment OptionsFrequently Asked Questions
Yes. FHA loans are the most commonly paired loan type with down payment assistance programs. State housing agencies like CHFA in Colorado and Florida Housing Finance Corporation are specifically structured to work alongside FHA financing. FHA guidelines allow third-party down payment assistance from eligible sources, and most state programs are built to meet those requirements.
It depends on the program type. Grants require no repayment. Forgivable second mortgages are forgiven if you stay in the home for the required period, typically five to ten years, but the balance may come due if you sell or refinance before that period ends. Deferred second mortgages carry no monthly payments but must be repaid when you sell, refinance, or pay off your first mortgage. Repayable seconds have regular monthly payments. Always review the specific terms before closing.
FHA itself requires a minimum 580 credit score for the 3.5% down payment option. Most DPA programs set their own minimum higher. CHFA in Colorado requires at least 620. Florida’s Hometown Heroes program requires 640 for FHA-backed loans. A score between 580 and the DPA program’s threshold may still qualify you for an FHA loan on its own, but the assistance won’t be available until you meet the program’s specific floor.
Possibly, yes. Most DPA programs define a first-time buyer as someone who has not owned a primary residence in the past three years. If you owned a home years ago but have been renting since, you likely qualify under that definition. Confirm with the specific program you are considering, since some have additional conditions beyond the three-year rule.
A DPA second mortgage is a recorded lien. If you refinance your first mortgage, the DPA servicer may need to agree to remain in second position, a process called subordination. Some programs allow this without restriction. Others have conditions that can delay or limit your refinancing options. This is worth asking about before you choose a program, not after you have already closed.
