CHAC Down Payment Assistance Program

On a $599,000 home in Denver using an FHA loan, the minimum 3.5% down payment is $20,965. CHAC provides up to 6% of the sale price, which would be $35,940, but the program caps at $12,000. So a Denver buyer would receive the full $12,000 maximum. That covers $12,000 of the $20,965 down payment, leaving $8,965 that you must cover from savings or other sources.

With the 5-Year Deferral option, you make no payments on the $12,000 CHAC loan for the first five years at 0% interest. After year five, the loan converts to a 25-year repayment at 5% interest with monthly payments of approximately $70. On top of the remaining down payment gap, Denver closing costs run $12,000 to $18,000, so your total out-of-pocket without additional assistance would be roughly $20,965 to $26,965.

For a more affordable Colorado market, consider a $350,000 home where CHAC would provide $12,000 (6% = $21,000, but capped at $12,000). The FHA down payment on $350,000 is $12,250, so CHAC covers nearly the entire amount, leaving only $250 plus closing costs out of pocket. Buyers can also pair CHAC with a CHFA first mortgage for additional rate savings.

The CHAC Down Payment Assistance Program can be paired with most first mortgage products, including CHFA (Colorado Housing and Finance Authority) first mortgages, FHA, VA, USDA, and conventional loans. CHAC does not require a specific first mortgage program, which gives borrowers flexibility to shop for the best rate. Pairing CHAC with a CHFA first mortgage (such as CHFA FirstStep or SectionEight) gives you both a competitive rate and down payment assistance.

CHAC cannot be combined with the CHFA Down Payment Assistance Grant or the CHFA Down Payment Assistance Second Mortgage Loan because both would result in multiple subordinate liens that may conflict. However, buyers should confirm current stacking rules directly with CHAC at 303-572-9445 because policies can change based on funding availability. CHAC also administers separate Denver-specific DPA programs that may have different stacking rules.

For the strongest combination available to a qualifying Colorado buyer, pairing the CHAC 5-Year Deferral loan ($12,000) with a CHFA FirstGeneration first mortgage (which includes up to $25,000 in deferred DPA for first-generation homebuyers) could provide up to $37,000 in combined assistance. Verify eligibility for both programs with your lender before counting on this combination.

CHAC is one of the most flexible DPA options in Colorado because it does not require a specific first mortgage product or certified lender. You can use it with any lender and any loan type, making it easy to shop for the best first mortgage rate independently. The 5-Year Deferral option is particularly attractive because it adds zero to your monthly payment for the first five years, giving you time to build equity and increase your income before payments begin. CHAC has operated since 1982 and processes loans statewide across all Colorado counties, unlike some programs that serve only specific cities or metro areas.

The $12,000 cap is a significant limitation in Colorado's expensive housing markets. In Denver, where the median home is $599,000, $12,000 covers only about 57% of the minimum FHA down payment. Buyers in high-cost areas will still need substantial savings or additional assistance. The $1,000 minimum borrower contribution, no co-signer policy, and 80% AMI income limit further narrow eligibility. Buyers with higher incomes or those in expensive markets may find the CHFA Down Payment Assistance Grant (up to $25,000 or 3% of the first mortgage) more helpful despite its stricter first mortgage requirements.