Colorado First-Time Home Buyer Programs (2026)
Colorado first-time buyers in 2026 can combine real help: CHFA mortgages paired with down payment assistance, low-down FHA loans, $0-down VA and USDA loans, and local grants. Most buyers stack a CHFA loan with down payment assistance and complete a homebuyer education class to qualify. Program terms change, so confirm current details.
If you’re buying your first home in Colorado Springs or anywhere in El Paso County, the hardest part usually isn’t the monthly payment — it’s the cash to get in the door. The good news: you have more program options than most buyers realize, and several of them were built specifically for people who haven’t owned before. This is the hub guide. We’ll walk the full menu, show you what stacks together, and point you to the deeper pieces on each program.
What programs help first-time home buyers in Colorado?
Colorado first-time buyers can use state (CHFA) programs, federal loan programs, and local grants — often combined. The state’s main engine is the Colorado Housing and Finance Authority (CHFA), which pairs a fixed-rate mortgage with down payment assistance. On top of that sit the federal low- and no-down options (FHA, VA, USDA) and city- or county-level grant programs.
Here’s the practical way to think about it: your loan type (FHA, conventional, VA, USDA) determines your down payment and credit floor. Your assistance program (CHFA DPA, local grant) determines how much of that down payment you actually pay out of pocket. The two layers work together.
| Program | Type | Down payment | Best for |
|---|---|---|---|
| CHFA FirstStep / FirstStep Plus | State + FHA loan | 3.5% (assistance available) | First-time buyers, lower credit |
| CHFA Preferred / Preferred Plus | State + conventional | 3% (assistance available) | Slightly higher credit, lower MI |
| FHA loan | Federal | 3.5% | Credit-building buyers |
| VA loan | Federal | $0 down | Veterans, active duty, Fort Carson |
| USDA loan | Federal | $0 down | Rural CO (parts of El Paso County) |
| Local grants | City/county/nonprofit | Reduces cash needed | Income-qualified buyers |
What is CHFA and how does its down payment assistance work?
CHFA is Colorado’s state housing finance authority, and its down payment assistance can cover up to 3% of your first mortgage as a grant you never repay — or a larger amount as a low-cost second mortgage. CHFA doesn’t lend directly; you apply through a CHFA-approved lender (a broker like 719 Lending can run CHFA loans), get a competitive 30-year fixed-rate first mortgage, and layer the assistance on top.
The two main loan tracks:
- CHFA FirstStep / FirstStep Plus — built on an FHA loan, with a 3.5% down requirement and a typical 620 minimum credit score (some approved lenders go to 580). Geared toward first-time buyers.
- CHFA Preferred / Preferred Plus — built on a conventional loan with 3% down and reduced mortgage insurance, a fit for buyers with slightly stronger credit.
On the assistance side, the grant option provides up to 3% of your first mortgage that is never repaid. On a $400,000 loan, that’s up to $12,000 toward your down payment or closing costs. The second-mortgage option can provide more but must be repaid when you sell, refinance, or pay off the home. CHFA programs carry income and purchase-price limits that vary by county and household size — for 2026, El Paso County limits generally land in the six figures, so many working households qualify. Every borrower must complete a CHFA-approved homebuyer education class before closing. Because exact percentages and limits are updated periodically, confirm current CHFA terms before you plan around them.
Which federal loan programs fit Colorado Springs first-time buyers?
FHA, VA, and USDA are the three federal programs most first-time Colorado buyers use, and each solves a different problem. They’re the foundation that CHFA assistance sits on top of.
- FHA loans — 3.5% down with flexible credit, the workhorse for first-time and credit-rebuilding buyers. See our Colorado Springs FHA loan guide.
- VA loans — $0 down, no monthly mortgage insurance, for eligible veterans, active-duty service members, and some surviving spouses. With Fort Carson, Peterson Space Force Base, and Schriever in the area, VA is huge locally. See our Colorado Springs VA loan guide.
- USDA loans — $0 down for homes in USDA-eligible rural areas. Parts of eastern and outer El Paso County qualify even though Colorado Springs proper does not.
VA is the standout for our military community: no down payment and no monthly MI means a service member can often buy with little cash beyond earnest money and inspection costs.
Are there grants that don’t have to be repaid?
Yes — the CHFA down payment assistance grant (up to 3% of your loan) is genuinely not repaid, and some local and nonprofit programs offer additional grant funds for income-qualified buyers. The key distinction to understand is grant versus second mortgage: a grant doesn’t have to be paid back, while a second-mortgage assistance loan sits silently behind your first loan and gets paid off when you sell or refinance.
Beyond CHFA, look at city, county, and employer-assisted programs, plus nonprofit options. These change and run out of funding, so the move is to ask your broker what’s currently funded the week you apply rather than relying on a list that may be stale.
Do I have to be a true first-time buyer to qualify?
Not always. Under most program rules, “first-time buyer” means you haven’t owned a primary residence in the past three years — so if you owned years ago and have been renting since, you may qualify again. Some CHFA programs and many federal loans don’t require first-time status at all, especially in designated targeted areas. Don’t disqualify yourself before a broker checks the actual rules against your situation.
How a Colorado Springs purchase actually pencils out
Here’s a real-world El Paso County scenario. With the local median sale price hovering around $465,000–$499,000 in 2026, take a first-time buyer purchasing at $450,000 on a CHFA-backed FHA loan:
| Item | Without assistance | With CHFA 3% grant |
|---|---|---|
| Purchase price | $450,000 | $450,000 |
| Down payment (3.5% FHA) | $15,750 | $15,750 |
| CHFA grant applied | $0 | up to ~$13,000 |
| Cash you bring to closing* | Higher | Substantially lower |
*Plus closing costs and prepaids; figures are illustrative, not a quote. Your numbers depend on rate, loan amount, and program — confirm current terms.
The headline: for many local buyers, CHFA assistance can turn “we need to save for another two years” into “we may be able to buy this year.”
What are the first steps to qualify?
Start with three moves: (1) get pre-qualified with a CHFA-approved lender to see which programs you fit, (2) complete a CHFA-approved homebuyer education class (often free and online), and (3) gather income and asset documents so your broker can confirm income limits and credit thresholds. From there it’s house-hunting with a clear budget and a program already lined up.
Frequently asked questions
Can I combine CHFA down payment assistance with an FHA loan?
Yes. CHFA’s FirstStep program is built on top of an FHA loan, so the 3.5% FHA down payment can be covered in large part by CHFA assistance. This stacking is how many first-time Colorado buyers get in with minimal cash.
Do I need to repay CHFA down payment assistance?
It depends on which option you take. The CHFA grant (up to 3% of your loan) is not repaid. The larger second-mortgage assistance is repaid when you sell, refinance, or pay off the home. Your broker will explain which fits your situation.
What credit score do I need for a Colorado first-time buyer program?
Most CHFA FHA-based programs use a 620 minimum, and some approved lenders go as low as 580. Conventional CHFA Preferred programs generally want stronger credit. These are guidelines, not promises — confirm your specific eligibility with a licensed lender.
Is there an income limit for these programs?
Yes, CHFA programs have income limits that vary by county, household size, and program. In El Paso County for 2026, limits generally reach into the six figures, so many working households qualify. Federal loans like FHA and VA have no income ceiling.
Does Colorado Springs qualify for USDA $0-down loans?
The city of Colorado Springs itself is generally not USDA-eligible, but parts of outer and eastern El Paso County are. A broker can pull the USDA eligibility map for a specific address before you fall in love with a home.
Talk to a local broker before you rule yourself out
The biggest mistake we see is buyers assuming they can’t afford it and never checking. As a Colorado Springs mortgage broker, 719 Lending shops CHFA, FHA, VA, USDA, and conventional options across many lenders to find the combination that fits your situation for the least cash. Reach out for a no-pressure conversation about which programs you may qualify for.
719 Lending Inc., NMLS #1601989 · Equal Housing Opportunity · This article is educational only, is not a commitment to lend, and not all applicants will qualify. 719 Lending is not affiliated with or endorsed by any government agency.
