The dream of homeownership can often feel distant, especially when faced with the daunting reality of a down payment. But what if I told you there are pathways to achieving that dream, even without a mountain of cash saved up?
When I was navigating my own home purchase, I wish I had known about the incredible resources available, particularly for first-time buyers. Now, as a Realtor, I've done the research, and I'm excited to share some of these opportunities with you.
One of the most well-known avenues for down payment assistance in our state comes from the Colorado Housing and Finance Authority (CHFA). Through CHFA, qualified homebuyers can receive up to $25,000 in down payment and closing cost assistance, significantly reducing the upfront costs of buying a home. The best part? Some of their assistance comes as a grant, meaning it doesn't need to be repaid – essentially, free money!
Building on this state-wide support, the Dearfield Fund, launched by Gary Community Ventures in 2021, takes a targeted approach to closing the racial wealth gap through homeownership. This fund offers up to $40,000 (or 17% of the purchase price, whichever is lower) in down-payment assistance specifically to first-time homebuyers who self-identify as Black or African American and have faced systemic barriers to owning a home. Beyond the crucial financial aid, the Dearfield Fund also provides ongoing support and resources to help homeowners build and manage their wealth long after closing.
Another valuable resource for aspiring homeowners is metroDPA. This program stands out due to its generous income eligibility, allowing buyers making up to $195,600 to potentially qualify for a no-payment, zero-interest, 30-year deferred second loan. Even better, metroDPA can often be combined with other favorable loan programs like VA and FHA, increasing its accessibility.
Beyond state and local programs, even the banking industry plays a role in expanding homeownership through the Community Reinvestment Act (CRA). This 1977 law encourages banks to address the credit needs of their local communities, particularly those with low- and moderate-income residents. By seeking out CRA-compliant lenders in designated areas, buyers may discover more suitable financing options. Notably, many CRA programs can be used for various purchase types, including primary residences, investment properties, and even vacation homes, offering incentives like reduced closing costs or interest rate reductions based on the loan amount.
Finally, for those seeking a truly affordable option, it's important to understand that 'affordable housing' encompasses more than just rental assistance. Organizations like Habitat for Humanity of Metro Denver and Elevation Community Land Trust build and sell designated affordable homes to qualified first-time, lower-income buyers at significantly reduced prices. While there may be some limitations on resale, these homes offer a fantastic opportunity to enter the housing market and build equity in desirable neighborhoods. Plus, they are often move-in ready!
Given today's higher mortgage rates, exploring these types of assistance is more critical than ever. Instead of waiting for interest rates to potentially drop, leveraging these programs could be your key to securing your first home now, while inventory is high and competition low.
As any experienced Realtor will tell you, time in the market almost always beats trying to time the market. So, take the plunge and explore these options! For the most up-to-date information and eligibility requirements, I encourage you to visit the websites of these organizations or reach out to me directly for personalized guidance. Homeownership might be closer than you think!
Written by West + Main Agent Kaitlyn Ward
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