Well it has started… today we recieved notice from the first investor to tell us that they were no longer accepting locks for seller assisted downpayment/FHA loans. While recent legislation put the end date at Oct 1, we have expected that the investors would start eliminating the option. This was only the first to do so, but we expect more to follow suit.
So, what are some other options? CHAC and CHFA are great if you live in Colorado… Here is some basic info about CHFA…
CHFA will lend you the 3% needed for the down payment requirement using a purchase loan. You can still ask the seller to contribute up to 3% towards your buyer closing costs. This can help if saving up for the downpayment has been tough or you would prefer to keep your savings for basic home improvements afterwards.
CHFA was created to increase the availability of affordable and accessible housing to the lower and middle income Coloradans. CHFA has many programs they offer and all will require a home buyers education class to be completed, in many cases it can even be taken online. The CHFA offices are centrally located downtown Denver and do take consumer calls. However to secure a CHFA loan you have to work with a CHFA approved lender. Summit Home Mortgage is a CHFA approved lender and is one of a small number of approved lenders in Colorado who can offer CHFA to you.
The way it works is CHFA will give you up to a 3% loan, whereby you utilize with the applicable CHFA first mortgage to buy your home. CHFA’s interest rates are very competitive to market rates, and as things get tougher in Denver, and with mortgage programs allowing down payment assistance demands for CHFA have grown. (For example; on the FHA program, the 2nd mortgage is ‘silent’, the note is for a 0% interest rate, and no payments are due for the first 9 years).
As a borrower you have to invest $1,000 into the transaction when you buy or $500 if you are refinancing your home. You must complete a home buyers education, and also live in the house. CHFA does impose income limitations, but the HUD AMI in Denver is $71,400 and they have allowances for folks who may make more money, due to more members in the household.
For more information visit their website at www.chfainfo.com .
We can answer your questions and get you approved for a CHFA loan today! Call or fill out our basic pre-approval and we will get in touch with you to move forward.