Think you need 20 percent down to buy in Lakewood? You might be closer than you think. Many Colorado buyers purchase with a small down payment, and some use down payment assistance to cover a big chunk of upfront costs. If you want to buy sooner without draining your savings, this guide is for you.
You will learn what down payment assistance is, how it works with FHA, conventional, VA, and USDA loans, what to expect for eligibility, and a simple step-by-step plan for Lakewood buyers. You will also see a real payment example and where to verify the latest rules. Let’s dive in.
What down payment assistance means
Down payment assistance, or DPA, helps you cover your down payment and sometimes your closing costs. Assistance can come in a few common forms:
- Second mortgage that you repay over time or when you sell or refinance
- Deferred or zero-interest second mortgage with no monthly payment
- Forgivable second mortgage that goes away after you live in the home for a set period
- Grants, matched funds, or closing-cost credits
Programs are run by state housing agencies, cities and counties, nonprofits, and sometimes lenders. Most programs set income and purchase price limits, require you to live in the home as your primary residence, and may require homebuyer education.
Colorado and Lakewood options
CHFA at a glance
The Colorado Housing and Finance Authority is the main state provider of first mortgages and DPA. You apply through participating lenders, and assistance is usually paired with a CHFA first mortgage. CHFA sets income and purchase price limits by county, and it often requires homebuyer education.
- Explore current programs, amounts, and limits on the CHFA website.
- Ask a local lender experienced with CHFA to confirm today’s products, since terms change.
Federal loans that pair with DPA
- FHA: Often 3.5 percent down for many buyers with credit scores of 580 or higher. Most DPAs can be used with FHA, but always confirm program compatibility. FHA requires mortgage insurance that affects your monthly payment.
- Conventional: As low as 3 to 5 percent down for eligible buyers. Private mortgage insurance applies under 20 percent down, and it can be canceled later when you reach the right equity level.
- VA: Eligible veterans and active-duty service members may qualify for 0 percent down. Some DPAs can help cover closing costs or a rate buydown. Learn more on the VA home loan page.
- USDA: 0 percent down for eligible rural areas and incomes. Many parts of Lakewood will not qualify as rural. Check eligibility details through USDA Rural Development and the official eligibility resources.
Compatibility depends on specific program rules and lender requirements, so verify your exact stack with your lender and the program administrator.
Local counseling and support
Lakewood and Jefferson County may offer housing counseling, education, or homeownership programs if funding is available. Availability changes, so check official pages and speak with a counselor.
- City resources: Start with the City of Lakewood for housing and community development information.
- HUD-approved counseling: Many programs require a class or counseling session. Find guidance on HUD’s website.
- County-level details: For localized taxes and property information, visit the Jefferson County Assessor.
Who typically qualifies in Lakewood
Income and price limits
Most programs use area median income limits that vary by household size and county. Purchase price caps are also common. Your lender and the program administrator will confirm which limits apply to your situation in Jefferson County.
First-time buyer definitions
Some programs require that you are a first-time buyer. Often this means you have not owned a home in the past three years. Other programs do not require first-time status. Always check the specific definition for the program you want to use.
Credit, DTI, and property rules
- Credit scores: FHA commonly works for scores of 580 or higher at 3.5 percent down. Conventional programs often prefer 620 or higher. Some DPA options may accept lower scores with compensating factors.
- Debt-to-income: Conventional programs often target 45 percent or less. FHA may allow higher DTI with compensating factors. Your lender will guide you.
- Property eligibility: Homes must be your primary residence. Single-family homes and condos can qualify, but condos may require project approval. Manufactured homes can be eligible with program-specific rules.
- Homebuyer education: Many DPA options, including CHFA, require education or counseling before closing.
How DPA pairs with loans
Typical structures and stacking
Most buyers use a 30-year fixed first mortgage and add a second mortgage or grant from a DPA program. Common structures include:
- Deferred, 0 percent interest second that is repaid when you sell or refinance
- Low-interest second with a small monthly payment
- Forgivable second that is reduced over time if you remain in the home
Your lender registers the DPA with the program administrator and ensures the first mortgage and DPA are compatible.
What it can mean for your payment
DPA reduces your upfront cash. Whether it changes your monthly payment depends on the structure. A forgivable grant or deferred second often leaves your monthly payment similar to a standard first mortgage. A repayable second can add a modest payment. Mortgage insurance and program fees also affect your total payment.
Why lender experience matters
Lenders can add their own standards beyond the program minimums. Working with a lender who knows CHFA and Jefferson County programs can help you pick the right combination, complete education on time, and avoid delays.
A real monthly payment example
These numbers are illustrative, not quotes. They show how down payment and mortgage insurance change the total. Assumptions include a 30-year fixed at 6.50 percent, property taxes at 0.7 percent of price, and homeowners insurance at 0.25 percent of price. FHA MIP is shown at 0.85 percent annual, and conventional PMI at 0.50 percent annual. All numbers are rounded.
Purchase price: 450,000
3.5 percent down, FHA-like
- Down payment: 15,750, loan: 434,250
- Principal and interest: about 2,745
- FHA mortgage insurance: about 307 per month
- Estimated taxes and insurance: about 338 per month
- Illustrative total: about 3,390 per month
5 percent down, conventional + PMI
- Down payment: 22,500, loan: 427,500
- Principal and interest: about 2,701
- PMI: about 179 per month
- Estimated taxes and insurance: about 338 per month
- Illustrative total: about 3,218 per month
0 percent down, VA or USDA where eligible
- Loan: 450,000
- Principal and interest: about 2,844
- VA has a one-time funding fee for many borrowers and no monthly mortgage insurance
- Estimated taxes and insurance: about 338 per month
- Illustrative total: about 3,182 per month
Key takeaway: A small change in down payment may not change principal and interest much, but mortgage insurance and program fees can move your total by several hundred dollars. DPA can cover part of your down payment and closing costs, which helps you buy sooner with less cash.
Step-by-step plan for Lakewood buyers
Talk with a HUD-approved housing counselor. Many DPA programs require it, and you will get a clear read on eligibility. Start with HUD’s site for counseling resources.
Get prequalified with a lender who works with CHFA and local programs. Ask about CHFA first mortgages and today’s DPA options. You can also review programs at the CHFA website.
Verify eligibility details for you and the property. Confirm your income against program limits, check purchase price caps in Jefferson County, and confirm property type rules. If you are exploring USDA, verify eligibility through USDA Rural Development.
Complete required homebuyer education. Many programs require a class or counseling certificate before closing.
Gather documents early. Common items include ID, 30 days of pay stubs, two years of W-2s, recent bank statements, tax returns, rent history, and proof of assets.
Choose the right assistance structure. If you want the lowest monthly payment, compare forgivable or deferred options. If you need to minimize upfront cash, any assistance that covers down payment or closing costs helps. Veterans should consider VA first, then layer DPA if it reduces closing costs or the interest rate.
Lock your rate and submit DPA paperwork. Your lender and the program administrator will coordinate approvals and closing requirements.
Local tips and common pitfalls
- Confirm limits early. Income, purchase price, and assistance amounts can change. Check the latest details on CHFA and with your lender.
- Budget for all upfront costs. Earnest money, inspections, appraisal, and lender and title fees still apply. Your out-of-pocket can be reduced with DPA, but it may not be zero.
- Watch the condo rules. Many condos are eligible, but project approval can be required. Ask your lender to verify early in your search.
- Plan for mortgage insurance. FHA MIP and conventional PMI are major parts of your monthly total. Compare both with your credit profile.
- Verify property taxes. Use Jefferson County resources, such as the Assessor’s office, to estimate taxes for your target price point.
Ready to take the next step?
Buying in Lakewood with less cash upfront is possible. With the right loan, the right DPA program, and a clear plan, you can move from researching to house hunting with confidence. If you want a local guide to help you compare options, connect you with CHFA-participating lenders, and build a strong offer strategy, reach out to Sam Calhoun for one-on-one guidance.
FAQs
Can CHFA down payment assistance work with FHA or conventional loans?
- Often yes, but compatibility depends on the specific CHFA product and lender rules. Confirm with CHFA and your lender before you apply.
Do I have to be a first-time buyer to use assistance in Lakewood?
- Some programs require first-time status, often defined as not owning a home in the past three years. Others do not. Always check the program’s definition.
Will down payment assistance raise my monthly payment?
- It depends on the structure. Forgivable or deferred seconds and grants may not add a monthly payment. Repayable seconds can add a small payment, and mortgage insurance still applies.
Can I use DPA with a VA loan in Lakewood?
- Sometimes. VA allows certain types of subordinate financing. DPA is often most helpful for closing costs or a rate buydown. Verify with the program and your VA lender.
Is USDA zero-down financing available in Lakewood?
- USDA targets rural areas, and many parts of Lakewood will not qualify. Check current maps and rules through USDA Rural Development.
What upfront costs should I still expect even with assistance?
- Plan for earnest money, inspections, appraisal, loan origination, title fees, and prepaid taxes and insurance. DPA can reduce cash needed but may not cover everything.
Where can I find local housing resources for Lakewood and Jefferson County?
- Start with CHFA, the City of Lakewood, HUD for counseling, and the Jefferson County Assessor for property tax information.
