CHFA Down Payment Assistance Grants vs Silent Second Mortgages in 2026
Updated October 2026
Down payment assistance can reduce the cash needed to buy a Colorado home, but two assistance packages with similar upfront benefits can produce different long-term costs. The key distinction is whether the assistance is a grant or a second mortgage that remains attached to the property.
Understand the available program pairing
CHFA’s FirstStep, SmartStep, and Preferred options are not interchangeable labels. Each has its own financing structure and eligibility requirements. Assistance availability depends on the selected program, so do not assume every first mortgage offers both forms of assistance.
Where available, a CHFA DPA Grant can provide up to 3% of the first mortgage amount, while a Second Mortgage can provide up to 4%. On a $400,000 first mortgage, those percentages represent $12,000 and $16,000 respectively. They are assistance illustrations, not percentages of the home’s purchase price.
Start with the Colorado Housing and Finance Authority (CHFA) for current program information. Ask a participating lender to identify the exact first mortgage and assistance product together on the comparison worksheet.
Separate deferred payments from forgiveness
A grant does not create the same repayment obligation as a second mortgage. A deferred or “silent” second may require no monthly payment, but that does not make its balance disappear. Review the note for repayment triggers, including a sale, refinance, or payoff of the first mortgage.
Before choosing, compare:
- The first mortgage interest rate and monthly mortgage insurance.
- Total assistance received and your required cash contribution.
- Income limits, credit requirements, and homebuyer education.
- Occupancy requirements and any purchase-price restrictions.
- The second mortgage balance and events that make it payable.
Use the Consumer Financial Protection Bureau to understand Loan Estimates, then request comparable estimates using the same purchase price and closing date.
Test the household budget after closing
Assistance addresses an upfront hurdle; it does not eliminate taxes, insurance, maintenance, or association dues. A newer Front Range subdivision may carry an additional 35–75 or more Metro District mills, while hail coverage can include a percentage deductible.
Run the proposed payment through the monthly payment calculator, using the specific property’s tax estimate rather than a statewide average. Review the Metro District tax guide before committing to a subdivision.
Finally, compare assistance against an unassisted loan. A larger upfront benefit may come with different pricing or a future repayment obligation. The useful comparison is cash needed now, monthly cost, and remaining debt when you expect to sell or refinance.
Compare Current Mortgage Rates
Compare current APRs, points, fees, and estimated monthly payments from participating lenders below.
Loan Program Comparison: 2026 Benchmarks
CHFA Down Payment Assistance Grants vs Silent Second Mortgages in 2026 — Compare IHCDA First Place 6.0% FHA assistance and Next Home 2.5%–3.5% in Indiana with MSHDA up to $10,000 in Michigan; verify eligibility and repayment or forgiveness terms.
Historical 2025 one-unit comparison: conforming $806,500; FHA floor $524,225. County and unit-count limits can differ.
| Loan program | Down payment / equity | 2026 one-unit baseline | Costs and page-specific comparison |
|---|---|---|---|
| Conventional | 3%–5% subject to eligibility | $832,750 | PMI generally below 20% down |
| FHA | 3.5% at 580+; 10% at 500–579 | $541,287 floor | 1.75% upfront MIP; 0.55% annual for >95% LTV, base loan ≤$726,200, term >15 years |
| VA | 0% for eligible borrowers | No VA limit with full entitlement | No monthly PMI; funding fee unless exempt |
| USDA | 0% for eligible borrowers | Income, address and repayment eligibility | Guarantee and annual fees; confirm current schedule |
| Jumbo | Lender-specific cash and reserves | Above applicable conforming limit | Lender-specific pricing and insurance |
| Home Equity / Refinance | Equity and underwriting dependent | Property and lender dependent | Compare closing costs, term and break-even |
Sources: FHFA limits; HUD FHA limits.
Editorial Methodology & Primary Sources
Verification date: Not recorded; check the primary source and lender timestamp before relying on an estimate.
Rate comparisons use participating lender feeds, not a whole-market survey or guaranteed offers. Freddie Mac PMMS is a market benchmark, not a personalized quote. Calculator models rely on published regulatory formulas and disclosed assumptions rather than fabricated first-person loan testing.
Monthly principal and interest use the amortization formula P × r / (1 − (1 + r)−n), where r is the monthly note rate and n is the number of payments; at zero interest use P / n. PITI adds monthly property taxes and homeowners insurance; PMI is separate. APR includes applicable finance charges under Regulation Z and is not the note rate used for payments. Compare lender Loan Estimates for actual APR and fees.
- Consumer Financial Protection Bureau (CFPB) — Loan Estimates, APR and borrower disclosures; Regulation Z.
- U.S. Department of Housing and Urban Development (HUD / FHA) — FHA program guidance.
- U.S. Department of Veterans Affairs (VA) — VA loan eligibility and benefits.
- Freddie Mac Primary Mortgage Market Survey (PMMS) — published rate benchmarks.
- U.S. Census state tax collections — state property tax benchmarks; confirm parcel-specific assessments and exemptions with the state revenue department and local assessor.
The payment snapshot uses illustrative annual taxes of 1% of home price, $1,200 insurance and 0.5% PMI below 20% down, not verified local quotes. Other calculators disclose their inputs and assumptions. Published guidance and lender feeds may change independently; confirm current program rules, taxes and offers before a decision.