What CHFA Grant Funds Cannot Be Used For in Colorado

If you’re asking what the grant funds from CHFA are not allowed to be used for, the answer comes straight from the Colorado Housing and Finance Authority itself: the foreclosure prevention grant funds cannot be used for making mortgage payments, or for curing any mortgage delinquency on behalf of a borrower.

This article explains which CHFA grant funds that restriction covers, what the money actually pays for, how these grants differ from CHFA’s down payment assistance, and what Colorado homeowners — including the many military families around Colorado Springs — should do next if they’re worried about falling behind.

What are the grant funds from CHFA not allowed to be used for?

The Colorado Housing and Finance Authority (CHFA) states plainly on its foreclosure prevention page that these grant funds are not allowed to be used for making mortgage payments, or curing any mortgage delinquency on behalf of a borrower.

In other words, the money does not go toward your loan. No one takes the grant and sends a check to your mortgage servicer, and no one uses it to pay off the past-due balance that triggered a foreclosure notice.

Here’s the quick breakdown:

• Not allowed: making mortgage payments on a borrower’s behalf
• Not allowed: curing a mortgage delinquency (paying off past-due amounts) for a borrower
• Allowed: free, professionally trained foreclosure mitigation counseling for at-risk homeowners
• Allowed: homebuyer education classes and increased access to foreclosure prevention counseling

With the direct answer out of the way, it helps to understand exactly which pot of CHFA money this rule applies to.

Which CHFA grant funds carry this restriction

The restriction applies to the grants CHFA has received to support its foreclosure prevention efforts. These are not the grants CHFA offers homebuyers at the closing table — they’re a separate funding stream with a separate purpose.

Where the grant money comes from

CHFA applied for and was awarded multiple grants from three sources: NeighborWorks America, the Colorado Attorney General’s office, and the U.S. Department of Housing and Urban Development (HUD). The awards began years ago and continued annually over an extended period.

CHFA describes these awards as supporting homebuyer education and increased access to foreclosure prevention counseling across Colorado.

What the funds are allowed to pay for

Using these funds, CHFA partnered with a network of nonprofit housing counseling agencies to provide free, professionally trained foreclosure mitigation counseling to homeowners at risk of foreclosure.

CHFA reports that these funds have helped thousands upon thousands of Coloradans receive free housing counseling services and homebuyer education classes, helping many avoid foreclosure.

So the money funds the counselors and the classes — which is exactly why it cannot double as payment relief. Let’s unpack what the two prohibited uses actually mean.

What “making mortgage payments” and “curing delinquency” mean

The two prohibited uses sound similar, but they describe different stages of trouble on a home loan.

No direct payments on the loan

Making mortgage payments means covering a borrower’s regular monthly obligation to the lender or servicer. The CHFA grant funds cannot be used this way, even temporarily, even for a homeowner in genuine hardship.

A homeowner who needs help with the payment itself is pointed toward counseling, where a trained professional can review the situation and work toward a resolution with the servicer.

No paying off past-due amounts

Curing a mortgage delinquency means bringing a past-due loan current — paying the missed payments and associated amounts so the loan is back in good standing. The grant funds cannot be used for that either, on behalf of any borrower.

This matters because homeowners facing foreclosure sometimes assume “foreclosure prevention funds” means direct financial rescue. With these particular CHFA grants, it means expert guidance instead — and that guidance is worth understanding before you dismiss it.

Don’t confuse these grants with CHFA down payment assistance

CHFA runs two very different kinds of assistance, and mixing them up causes real confusion for Colorado buyers and homeowners.

Help for buyers at the closing table

Through its statewide network of Participating Lenders, CHFA offers home purchase and refinance loan programs, plus grants and second mortgage loans for down payment and/or closing cost assistance.

That down payment and closing cost assistance is aimed at people buying a home — it flows through the loan transaction with a CHFA Participating Lender.

Help for homeowners in trouble

The foreclosure prevention grant funds, by contrast, support counseling and education for homeowners who already own and are at risk of losing the home. Those are the funds that cannot touch the mortgage payment or the delinquency.

If you’re a buyer researching CHFA assistance, the foreclosure prevention restriction isn’t the rule that governs your situation — but knowing the difference keeps you from reading the wrong rulebook. Next, let’s look at who the restriction actually applies to.

Who this applies to

The restriction on grant fund usage applies to the foreclosure prevention side of CHFA’s work, which serves a specific audience.

Homeowners at risk of foreclosure

CHFA’s foreclosure prevention efforts are built for Colorado homeowners who are behind on the mortgage, worried they soon will be, or who have received notices from their servicer.

For these homeowners, the grant-funded resource available is free counseling through CHFA’s nonprofit housing counseling partners — not a payout. The counselor’s job is to help you find a path to a successful resolution.

Military families in Colorado Springs

Colorado Springs is a heavily military market, and a PCS move, a deployment, or a change in household income can strain a mortgage quickly. CHFA’s counseling partner list includes a Colorado Springs organization, Rocky Mountain Community Land Trust, along with agencies serving Pueblo, Denver, and communities across the state.

If you’re a service member or veteran homeowner feeling the squeeze, the same free counseling resources apply to you — and the same restriction does too. The money funds the help, not the payment.

Now, where can you verify all of this for yourself?

What the official source says and where to read it

The authoritative statement lives on CHFA’s foreclosure prevention page at chfainfo.com. CHFA writes: “These grant funds are not allowed to be used for making mortgage payments, or curing any mortgage delinquency on behalf of a borrower.”

The same page describes CHFA’s commitment to helping Coloradans achieve and sustain homeownership through sound financial decision-making, and lists its housing counseling partners by region, with downloadable versions available in English and Spanish.

CHFA is also a sponsor of Colorado Housing Connects and supports the Colorado Foreclosure Hotline. According to CHFA, most homeowners who have met face-to-face with a housing counselor through the Hotline have found a successful resolution to their foreclosure situation.

Reading the source directly takes a few minutes and settles the question — but the more useful question is what counseling can actually do for you.

What foreclosure counseling actually gets you

Free foreclosure mitigation counseling may sound like a consolation prize next to direct payment help, but CHFA’s track record suggests otherwise: many Coloradans who received counseling through these grant-funded programs avoided foreclosure.

A trained counselor reviews your full financial picture, explains where you stand in the foreclosure timeline, and helps you communicate with your mortgage servicer about possible resolutions.

The counseling is professionally trained and free to the homeowner — that’s precisely what the grant funds exist to pay for.

For homeowners who got into the home with support from CHFA’s homebuyer education requirement, counseling is a natural extension of the same philosophy: informed homeowners make better decisions under pressure.

So if you’re behind on payments right now, here is the sequence to follow.

Steps if you are behind on the mortgage

First, call the Colorado Foreclosure Hotline. The number is published on CHFA’s foreclosure prevention page, and the hotline connects homeowners with counselors.

Second, consider contacting one of CHFA’s housing counseling partners directly. The list spans the state — Boulder County, Denver, Pueblo, Grand Junction, Durango, Fort Collins, Fort Morgan, Cañon City, Colorado Springs, and more.

Third, don’t wait. Foreclosure timelines move whether or not you engage, and the earlier a counselor gets involved, the more options tend to remain on the table.

Fourth, keep communicating with your servicer. The grant-funded counseling supports that conversation; it doesn’t replace it.

If you’re not in trouble but are planning to buy with CHFA help, the process looks quite different — and it starts well before closing.

If you’re buying: how CHFA program loans work

CHFA does not lend money directly to consumers. It works through a statewide network of CHFA Participating Lenders who qualify customers and make all mortgage loans under CHFA programs.

CHFA’s general purchase requirements include a minimum mid-credit score threshold, income that does not exceed CHFA’s income limits, a minimum borrower financial contribution toward the purchase, and completion of a CHFA-approved homebuyer education class before closing. Your Participating Lender verifies all of it, and you must also qualify under the lender’s own underwriting guidelines, which cover things like your credit report and overall debt picture.

The homebuyer education requirement

Every CHFA borrower must individually and independently register for and complete a CHFA-approved homebuyer education class before the mortgage loan closing date. The requirement does not apply to CHFA refinance programs.

Classes are available in person and online, in English and Spanish, and cover budgeting as a homeowner, how credit impacts homebuying options, finding a real estate agent and a lender, the costs of homebuying, the approval process, and what to expect after closing.

Each borrower receives a certificate of completion from the education provider — not from CHFA — and provides it to the lender for the loan file. Certificates expire, so CHFA recommends taking the class early in the housing search; waiting can delay or postpone closing. Online participants must also complete a follow-up call with their education provider before the certificate is issued.

Whether you’re buying or trying to keep the home you have, the path forward starts with one conversation.

Your next step

If you’re a Colorado homeowner at risk of foreclosure, call the Colorado Foreclosure Hotline listed on CHFA’s foreclosure prevention page or reach out to a CHFA housing counseling partner near you. The counseling is free, and it’s exactly what the grant funds were awarded to provide.

If you’re a buyer exploring CHFA down payment or closing cost assistance, start with a CHFA-approved homebuyer education class and a conversation with a lender who works with CHFA programs. The team at 719 Lending in Colorado Springs talks through CHFA questions with Colorado borrowers — including military families navigating PCS timing and BAH budgets — every week, and can help you figure out which questions to ask next.

Frequently asked questions

Can CHFA grant funds be used to make my mortgage payment?

No. CHFA states that its foreclosure prevention grant funds are not allowed to be used for making mortgage payments or curing any mortgage delinquency on behalf of a borrower. The funds pay for free foreclosure mitigation counseling and homebuyer education instead.

What do CHFA’s foreclosure prevention grant funds actually pay for?

The grants — awarded by NeighborWorks America, the Colorado Attorney General’s office, and HUD — fund free, professionally trained foreclosure mitigation counseling through CHFA’s nonprofit housing counseling partners, plus homebuyer education classes for Coloradans.

Does CHFA offer any money that can go toward buying a home?

Yes, but it’s a separate program. Through its network of Participating Lenders, CHFA offers grants and second mortgage loans for down payment and/or closing cost assistance on purchase loans. That is distinct from the foreclosure prevention grant funds, which cannot be applied to a mortgage.

Who should I call if I’m behind on my mortgage in Colorado?

Call the Colorado Foreclosure Hotline, which CHFA sponsors through Colorado Housing Connects, or contact one of CHFA’s housing counseling partners — including Rocky Mountain Community Land Trust in Colorado Springs. According to CHFA, most homeowners who met face-to-face with a hotline counselor found a successful resolution.

Is CHFA foreclosure counseling really free?

Yes. CHFA’s grant funds pay the nonprofit counseling agencies so the service is free to the homeowner. That’s the purpose of the grants — funding counseling, not paying borrowers’ loans.

Does CHFA lend money directly to homebuyers?

No. CHFA does not lend directly to consumers. All CHFA loan programs are delivered through its statewide network of Participating Lenders, who qualify borrowers and make the mortgage loans.

719 Lending Inc., NMLS #1601989 · Equal Housing Opportunity

719 Lending Inc. is not affiliated with or endorsed by HUD, FHA, VA, USDA, CHFA, the CFPB, or any government agency.

Last updated: October 2026