The Colorado Housing and Finance Authority made an announcement today offering a new product for low-income borrowers, as well as new down payment assistance and closing cost assistance options for all buyers using any CHFA program.
Original Release from CHFA:
New Down Payment Assistance Options
CHFA is expanding and enhancing its down payment assistance options for purchase loans to give your borrowers more choices. In early March, the following changes will occur:
- CHFA DPA Grant
Available for up to 4 percent of the total first mortgage loan amount, the grant may be used for down payment, closing costs, and/or prepaids. This increased flexibility gives your borrowers more ways to use the grant as needed for their home purchase. This 4 percent grant will replace the current 3 percent CHFA DPA Grant.
- Zero-percent Second Mortgage Loan
Available for up to 5 percent of the total first mortgage loan amount, this product will be a subordinate zero-percent interest mortgage with no monthly payment, but it must be repaid after the payoff/refinance of the first mortgage loan in accordance with the promissory note. It may also be used for down payment, closing costs, and/or prepaids. This product will also have a lower interest rate than the grant, offering your borrowers another affordable assistance option.
- 1 percent Borrower Premium
The current 1 percent Borrower Premium available for purchase loans will be eliminated with the introduction of the new 4 percent grant and the 5 percent second mortgage. All Borrower Premium options will remain for refinance loans.
Please note, borrowers may only select one of the two available down payment assistance options. The grant and second mortgage cannot be combined on the same transaction. Both are only available for select purchase mortgages.
New product for very low-income borrowers
CHFA will soon be offering a special Freddie Mac® loan product for very low-income borrowers, defined as those earning 50 percent or less of Area Median Income for the county in which they reside.
Through this new program, these borrowers will be able to obtain a CHFA Preferredsm, CHFA Preferred Plussm, or CHFA Advantagesm mortgage loan at a lower interest rate than is available for the standard versions of these products. All program guidelines other than income remain the same as for the standard products. Only Freddie Mac loans underwritten through the Loan Product Advisor® AUS are eligible for this program and its reduced interest rates.
CHFA has helped over 88,695 Colorado homebuyers achieve homeownership with the help of their various products and believes in strengthening Colorado “by investing in affordable housing and community development.”
More questions on the new down payment assistance options and low-income products? Please contact me today!