How Colorado Springs First-Time Buyers Get CHFA Down Payment Grants

Table of Contents

• Why Down Payment Assistance Matters in Colorado Springs Right Now
• CHFA Down Payment Assistance: Grant vs. Second Mortgage
• CHFA Eligibility Requirements for El Paso County Buyers
• Stacking CHFA with the Pikes Peak Down Payment Assistance Program
• The FHA Loan Connection
• How to Access CHFA Programs: A Step-by-Step Path
• Neighborhoods Worth Exploring as a First-Time Buyer
• Putting It All Together

Colorado Springs has added residents at a pace that keeps housing inventory tight and prices elevated. The median home price sat at $455,000 over the three months ending September 2026. For a first time home buyer earning close to the city’s average annual salary of roughly $58,900, scraping together a conventional down payment while covering closing costs can feel like an impossible arithmetic problem. The Colorado Housing and Finance Authority (CHFA) exists specifically to solve that problem, and its programs are more accessible than most buyers realize.

This guide breaks down how CHFA down payment assistance actually works, explains the critical difference between a grant and a second mortgage, and shows how El Paso County buyers can stack local programs on top of CHFA funds to maximize their purchasing power.

Why Down Payment Assistance Matters in Colorado Springs Right Now

A five-percent down payment on a $455,000 home is $22,750, before closing costs enter the picture. That number alone disqualifies many otherwise creditworthy buyers. CHFA’s programs were designed to bridge exactly this kind of gap, and in 2024 the authority invested $2.6 billion statewide to support affordable housing and community development, assisting 5,291 customers through its home mortgage loan programs.

Colorado Springs remains one of the fastest-growing cities in Colorado. The metro added 2,288 residents between July 2024 and July 2025, the largest one-year gain among Colorado cities that year. More residents competing for a limited housing stock keeps upward pressure on prices, which makes down payment assistance a practical necessity rather than a nice-to-have for many first time home buyer households.

Key takeaway: CHFA down payment assistance grants of up to the lesser of three percent of the first mortgage or $25,000 require no repayment. Choosing between a grant and a second mortgage is the single most consequential decision a first time home buyer will make when using CHFA funds.

CHFA Down Payment Assistance: Grant vs. Second Mortgage

CHFA offers two distinct structures for down payment help. Understanding the difference before you apply will save you from choosing the wrong tool for your situation.

The Grant Option

CHFA’s grant provides up to the lesser of three percent of the first mortgage amount or $25,000. The money does not have to be repaid under any circumstances. There are no liens, no deferred obligations, and no repayment triggers if you sell or refinance later.

The trade-off is the cap. On a $455,000 purchase with a standard FHA loan, three percent of the loan amount lands around $13,000. That covers a meaningful portion of a down payment but may not fully close the gap for buyers in higher price ranges.

The Second Mortgage Option

CHFA’s deferred second mortgage provides up to the lesser of four percent of the first mortgage or $25,000. The repayment is deferred until one of the following events occurs:

• The first mortgage is paid off in full
• The home is sold
• The home is refinanced
• The property is no longer your primary residence

The second mortgage carries no monthly payment while you live in the home, which preserves cash flow. However, the obligation follows the property. Buyers who plan to sell within a few years should factor the repayment into their projected net proceeds.

Specialty Programs: FirstGeneration and HomeAccess

Two CHFA programs offer the full $25,000 regardless of the first mortgage amount. The FirstGeneration program targets buyers who are the first in their immediate family to purchase a home or who have been in foster care. The HomeAccess program is designed for buyers with a permanent disability or who have a dependent child with a permanent disability. Both programs use the second mortgage structure, but the higher ceiling makes them worth exploring if you qualify.

CHFA Eligibility Requirements for El Paso County Buyers

CHFA programs come with specific thresholds. Knowing these before you talk to a lender will tell you quickly whether you are in range.

Credit and Income

• Minimum credit score: 620
• Statewide qualifying income cap: $178,920 (as of October 2026)
• El Paso County income limit: $127,800
• Purchase price cap in El Paso County: $566,730 outside targeted areas (as of October 2026)

The El Paso County income limit of $127,800 is well above the city’s median household income of $83,672 recorded in 2024, which means the majority of first time home buyer households in the area fall comfortably within range.

Minimum Borrower Contribution

CHFA requires a minimum borrower contribution of $1,000. This amount can be gifted from a family member, which removes one more barrier for buyers with limited savings. The contribution demonstrates skin in the game without demanding a large personal reserve.

Homebuyer Education

Completing an approved homebuyer education course is mandatory for every CHFA program. This is not a box-checking exercise. The CHFA homebuyer education curriculum covers budgeting, loan types, the closing process, and long-term maintenance costs. Buyers who complete it consistently report feeling more prepared for the realities of ownership, not just the transaction itself.

Courses are available online and in person. Plan for roughly eight hours of instruction. You will need your certificate of completion before your lender can submit the CHFA file.

Stacking CHFA with the Pikes Peak Down Payment Assistance Program

El Paso County relaunched its local down payment assistance program as the Pikes Peak Down Payment Assistance (PPDPA). This program can be layered on top of CHFA assistance, which is where the math gets compelling for a first time home buyer working with a tight budget.

PPDPA Program Details

The PPDPA provides up to five percent in forgivable down payment assistance. Forgivable means the funds convert to a grant after you meet the program’s residency requirements, so there is no repayment obligation if you stay in the home long enough.

The program also includes a one-percent grant specifically for “Hometown Heroes,” a category that covers:

• Educators
• First responders
• Healthcare workers
• Veterans and active-duty military

Given Colorado Springs’ large military population near Fort Carson, Peterson Space Force Base, Schriever Space Force Base, and the Air Force Academy, a significant share of local buyers qualify for this additional grant. That one percent on a $455,000 purchase is $4,550 in additional assistance that requires no repayment.

Combined Assistance Example

A buyer using a CHFA second mortgage at four percent plus PPDPA at five percent could theoretically access assistance approaching nine percent of the purchase price. On a $420,000 home, that is roughly $37,800 in combined assistance before the $25,000 caps apply. Actual figures depend on program caps, lender overlays, and current program availability, so confirm numbers directly with a CHFA-approved lender.

The FHA Loan Connection

Most CHFA down payment assistance is paired with FHA financing. The FHA loan limit for El Paso County in 2026 is $541,650. With the median home price at $455,000, most Colorado Springs purchases fall within this limit, which keeps FHA a viable primary loan for the majority of first time home buyer transactions in the area.

FHA loans require a minimum three-and-a-half-percent down payment for borrowers with credit scores of 580 or above. CHFA assistance can cover that entire requirement, which means a qualified buyer could reach the closing table with only the $1,000 minimum contribution out of pocket, plus closing costs. Closing costs are separate and typically run between two and five percent of the loan amount; some sellers will cover a portion through negotiation.

How to Access CHFA Programs: A Step-by-Step Path

1. Check your credit score. You need at least 620. If you are below that threshold, work with a lender or nonprofit housing counselor to build your score before applying.
2. Verify your income against El Paso County limits. The cap is $127,800 for qualifying income in this county as of October 2026.
3. Complete CHFA-approved homebuyer education. Register through the CHFA down payment assistance page and confirm your course provider is on the approved list.
4. Find a CHFA-participating lender. Not every lender in Colorado Springs is approved to originate CHFA loans. Ask specifically whether the lender is CHFA-certified before you submit an application.
5. Decide between the grant and the second mortgage. If you plan to stay in the home long-term, the second mortgage’s higher cap may serve you better. If you expect to sell within five to seven years, the grant’s clean exit may be worth the lower ceiling.
6. Ask your lender about PPDPA stacking. Confirm whether your lender can combine CHFA and Pikes Peak Down Payment Assistance in a single transaction. Not all lenders coordinate both programs.
7. Get pre-approved and begin your search. A CHFA pre-approval letter signals to sellers that your financing is structured and your assistance is committed, not speculative.

Neighborhoods Worth Exploring as a First-Time Buyer

Price point matters when you are working within CHFA’s purchase cap of $566,730 in El Paso County. Several Colorado Springs communities offer homes well below that ceiling, giving buyers room to work.

Fountain sits directly east of Fort Carson and consistently offers some of the most affordable entry-level inventory in the region. The Powers Corridor on the east side of the city combines accessibility with a wide range of price points, making it a practical target for first time home buyer searches. For buyers open to a short commute, Peyton offers larger lots at lower prices than comparable in-city options.

A broader look at all areas in the region is available through the communities overview, and you can filter active listings by price range using the home search tool.

Putting It All Together

CHFA programs are well-structured and accessible to most Colorado Springs buyers who meet the credit and income thresholds. The decision between a grant and a second mortgage is not trivial. It affects your net proceeds if you sell early and your total cost of ownership over time. Take that decision seriously before you sign anything.

Layering PPDPA on top of CHFA assistance is one of the most effective strategies available to a first time home buyer in El Paso County right now. The programs were designed to work together, and local lenders who specialize in these transactions know how to structure the files correctly.

The buyer’s guide on this site walks through how the Colorado Springs purchase process works from pre-approval through closing, including how assistance programs fit into offer strategy and negotiation. If you have specific questions about how CHFA interacts with your price range, timeline, or military status, reach out directly. The number is (719) 302-0602, and the conversation costs nothing.

Frequently Asked Questions