Colorado Homes For Sale | Housing Finance Authority

Colorado homes for sale | Housing Finance Authority

CHFA (Colorado Housing Finance Authority) is a non-profit investor that sells tax free municipal bonds to fund their loans and is there specifically to help low to middle income buyers into homes. Under the current market conditions in
Colorado this is a very beneficial program for new home buyers looking to move up in terms of owning real estate. Both FHA and conforming loan programs are allowed to be funded through CHFA. The CHFA program is the antidote for the aggressive lending practices that are now under so much scrutiny. CHFA sets the Interest rate so a lender could not charge a higher interest rate even if they wanted to and CHFA puts a restriction on the closing fees that a lender can charge so CHFA is considered a loan program that protects home buyers.

There are 4 programs that CHFA offers. All programs require the buyer to attend a CHFA approved, free first time buyers education course. From our experience these classes help educate the buyer as well fulfill their commitment to getting involved in this program.

The four different programs are as follows:

1) MRB First Step: This is the program for first time buyers (someone that has not had an ownership interest in a home for at least three years). This is a 30 year fixed loan. There are income limits, for example a 2 person family can not make more then $71,400 a year. There are also purchase limits, for example in the Denver Metro area, the limit is $365,100. CHFA also offers a 3% “Silent 2nd” for down payment assistance. This 2nd mortgage has no interest or payments due for the life of the loan but is a lien against the property so when the buyer is done with it they have to give it back. So if the buyer sells the property, refinances the mortgage, or lives there for 30 years, the original 3% must be paid back to CHFA. This essentially offers the buyer the opportunity to finance 100% of the loan. However, if a buyer uses the CHFA 2nd mortgage for down payment assistance, the interest rate on the 1st mortgage will be 1/4% higher then if they bring their own 3% down payment. To qualify for this type of loan the buyer must put in at least $1000 of there own capital as required. The interest rates are set by CHFA at an affordable level usually below the normal prevailing market rates. They also cap the amount of closing costs a lender can charge at $600 plus a 1% origination fee. For more info on this program go to the following website www.CHFAinfo.com for more details.

Tom Reed and Bill Brown are local authors and real estate experts of Legacy Real Estate Brokers Inc. in Denver Colorado. You can visit their website at www.discovercoloradorealestate.com.