Is CHFA a conventional loan?
CHFA Loan Overview
The Colorado Housing and Finance Authority (CHFA) is a state-affiliated housing finance agency that provides affordable homeownership options to Colorado residents. CHFA loan programs are designed to help eligible borrowers purchase a home with down payment assistance, lower interest rates, and other incentives. But is CHFA a conventional loan?
CHFA Loan Types
CHFA offers several different loan types, including:
- CHFA Advantage: This is the standard CHFA loan program, which offers competitive interest rates and down payment assistance for eligible borrowers.
- CHFA SmartStep: This loan program is designed for first-time homebuyers who have completed a homebuyer education course. It offers lower interest rates and down payment assistance.
- CHFA Preferred: This loan program is for borrowers who have a credit score of 680 or higher. It offers lower interest rates and down payment assistance.
Conventional Loan vs. CHFA Loan
A conventional loan is a mortgage that is not backed by a government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Conventional loans typically require a higher down payment and have stricter credit requirements than government-backed loans. CHFA loans are not conventional loans because they are backed by a state-affiliated housing finance agency.
Benefits of CHFA Loans
There are several benefits to getting a CHFA loan, including:
- Down payment assistance: CHFA offers down payment assistance grants and silent second mortgages to eligible borrowers.
- Lower interest rates: CHFA loans typically have lower interest rates than conventional loans.
- Forgivable second mortgage: Some CHFA loans come with a forgivable second mortgage, which means that the borrower does not have to pay it back if they stay in the home for a certain amount of time.
- Homebuyer education: CHFA requires all borrowers to complete a homebuyer education course, which can help them make informed decisions about the homebuying process.
CHFA Loan Requirements
To qualify for a CHFA loan, borrowers must meet certain requirements, including:
- Income limits: Borrowers must have a household income that is below a certain threshold, which varies depending on the location and size of the home.
- Credit score: Borrowers must have a credit score of at least 620, although some loan programs require a higher score.
- Homeownership education: Borrowers must complete a homebuyer education course before closing on their CHFA loan.
- Property type: CHFA loans are only available for certain types of properties, including single-family homes and some condos.
How to Get a CHFA Loan
To apply for a CHFA loan, borrowers should:
- Contact a CHFA-approved lender: Borrowers must work with a CHFA-approved lender to apply for a CHFA loan. Mortgage Brokers Pro is one such lender, with years of experience in helping borrowers access CHFA loans.
- Complete a homebuyer education course: Borrowers must complete a homebuyer education course from an approved provider before they can close on their CHFA loan.
- Meet eligibility requirements: Borrowers must meet the income, credit score, and other eligibility requirements set by CHFA.
- Submit their application: Borrowers must submit their CHFA loan application through their approved lender.
In Conclusion
CHFA loans are a great option for Colorado residents who want to buy a home but need help with down payment assistance and lower interest rates. While CHFA loans are not conventional loans, they offer many benefits that can make homeownership more affordable and accessible. If you are interested in a CHFA loan, contact Mortgage Brokers Pro today to learn more about your options and start the application process.