CHFA Mortgage

Your income needs to fall within the CHFA guidelines for your household size

What does this mean? CHFA has specific qualification guidelines for borrower income limits. In some cases, CHFA looks only at the income the CHFA lender uses for purposes of qualifying a borrower. In other cases, they look at the total gross income of the borrower. In addition, there are different limits depending on the county you live in and the number of members in your household. As an example, if you wanted to purchase a house in Boulder County, the CHFA Preferred program would provide for an income limit of $148,120 with no limit on the number of people living in the home, while the CHFA Preferred Very Low Income program only allows for total income of $62,700 regardless of the number of people living in the home. As you can see, income requirements can vary extensively from program to program even in the same county, so it is very important to have the assistance of an experience CHFA Lender like 5280Lend.com to help you navigate the programs.

You don’t have enough saved to make a down payment or cover closing costs

Many people find themselves in this situation. Your income may be good enough, but you haven’t been able to save enough for a down payment and/or to cover closing costs. CHFA Loans can help with this situation. When you qualify for a CHFA Loan you can also qualify for funds to help you with your down payment and closing costs either through a grant or a small second mortgage depending on how much assistance you require. The terms vary and you will want to discuss which option is best for you with 5280Lend.com.

All borrowers have a mid-credit score of 620 or higher

While many loan options require extremely good credit to qualify, CHFA loans usually only require a mid-credit score of 620 or higher. What is a mid-credit score? Lenders use the three major credit agencies, Transunion, Equifax and Experian to check your credit when you apply for a loan. They usually receive 3 different credit scores from the three agencies depending on what information each agency has. The mid-credit score is the middle score of the three. So if your three credit scores were 615, 625, and 640, your mid-credit score would be 625. All of the borrowers’ mid-credit scores must be 620 or higher so if you have more than one person on the loan, they all must have mid-credit scores of at least 620.

Provide a personal financial contribution of at least $1000 towards the down payment

Although there is down payment assistance for those who qualify for CHFA Loans, CHFA still wants to know that you have a personal stake in the home buying process. Providing this amount, which we understand can be difficult for some, help demonstrate the seriousness of the borrower’s commitment. The funds can be money the borrower has saved themselves, or a cash gift from a family member, or any combination of the two. The $1000 is just a minimum. Borrowers can always contribute more which can lower your monthly payment.

Borrowers must qualify under CHFA Participating Lender guidelines in addition to meeting CHFA program requirements

Although CHFA Programs come from CHFA, borrowers must still be qualified through a CHFA Participating Lenders such as 5280Lend.com. CHFA Loans are only available through a CHFA Participating Lender.

CHFA’s mission is to “strengthen Colorado by investing in affordable housing and community development.” CHFA: Colorado Housing and Finance Authority (CHFA) (chfainfo.com) They are not a direct lender. The don’t want to waste resources needed to provide funding for loans by having to staff for underwriting, so they work through CHFA Participating Lenders that have been trained in CHFA guidelines and program requirements. CHFA Participating Lenders do all of their traditional underwriting in addition to ensuring that borrowers meet CHFA requirements.

The property being purchased must be an eligible property under CHFA guidelines

In addition to a borrower having qualifying income limits, credit score, and meeting lender guidelines, the property must meet CHFA guidelines as well. The following types of properties meet CHFA guidelines:

• Single family homes
• Single-unit condominiums
• Planned Unit Developments – In a Planned Unit Development residents own both the home and the property on which it sits. The home is in a community with common areas that are owned by all the PUD’s homeowners. PUD’s owners elect officers from their members to a homeowners association (HOA) to govern the management and operation of the common areas. PUD homeowners also pay dues to the HOA.
• Townhomes
• Manufactured homes
• and Accessory Dwelling Units (ADUs) – An ADU is a small home that can be built on the same lot alongside another, larger single-family home, or as a part of a community development. For CHFA purposes an ADU may be a qualifying property if:
  • It is zoned for Single Family occupancy
  • It is not zoned for 2-4 units
  • It meets investor guidelines and city/county zoning ordinances
  • It is not an income-producing property and is only for personal use.

All borrowers must attend a CHFA-approved homebuyer education class (in person or online) prior to loan closing

The final step in obtaining a CHFA Loan is for all borrowers to attend a homebuyer education class. These classes are not just a box you need to check. The classes are designed to make sure that you understand the responsibilities of homeownership and to provide education on how to create a budget, how to manage your money, the effect of credit scores on the homebuying process, how to improve your credit and much more. You may complete the course at any point in the loan process, but it is recommended that you do it as soon as possible since the loan cannot close without it. The certificate you receive upon completion is good for 12 months so there is no reason not to do it earlier rather than later.