Proposition 123 & Affordable Housing Support

Colorado is taking big steps to make homeownership and affordable housing more accessible. One of the main programs helping with this is funded by Proposition 123, which voters approved in November 2022. The measure allows the state to direct existing tax revenue toward supporting affordable housing projects across Colorado.
 
It’s important to note that individuals don’t apply directly for Proposition 123 funds. Instead, the funds are used to support specific programs, which you can apply for. Think of it as a behind-the-scenes boost that makes housing programs possible.
How the Funding Works
The money from Proposition 123 is split between two main state offices:
‣ 60% goes to the Office of Economic Development and International Trade (OEDIT), which manages the Affordable Housing Financing Fund in partnership with the Colorado Housing and Finance Authority (CHFA). This fund supports land banking, equity, and debt investments to advance affordable housing across the state.
‣ 40% goes to the Department of Local Affairs (DOLA) through its Division of Housing (DOH), which manages the Affordable Housing Support Fund. This fund helps support a variety of homeownership and homelessness programs.

Who Can Benefit?
Programs supported by Proposition 123 funds are designed to help affordable housing projects, not individuals directly. To qualify for support from the Affordable Housing Financing Fund, projects must be located in a jurisdiction that has completed a Proposition 123 Local Government Affordable Housing Commitmentwith DOLA’s Division of Housing.



Colorado Homebuyer Programs



Colorado Housing and Finance Authority (CHFA)


CHFA is Colorado’s trusted partner for affordable and responsible homeownership. Through statewide networ​k of approved lenders, they offer ​home purchase loans and grants; and second mortgage loans for down payment and/or closing cost assistance.



Eligible loan types / Assistance types:


First mortgage loan programs (conventional, FHA, VA, USDA etc.) are eligible to use CHFA down-payment and/or closing cost assistance.  



Two main assistance options:

  • Down Payment Assistance Grant – grant (no repayment) up to the lesser of $25,000 or 3% of the first mortgage.  
  • Second Mortgage Loan – up to the lesser of $25,000 or 4% of the first mortgage. Repayment is deferred until a triggering event (sale, refinance, payoff, or home ceases to be primary residence).  

 


Eligibility requirements:

  • Meet CHFA income limits for the program / county. CHFA publishes income & purchase-price limits.  
  • Credit score minimum around 620 for most CHFA loans.  
  • First-time buyer status is required for some programs (e.g. FirstStep) or veterans, etc. Others (e.g. SmartStep) might not require first-time status.  
  • Buyer must attend CHFA-approved homebuyer education.  
  • Must use eligible lenders (“Participating Lenders”).  
     


Fees, interest rates, terms:

  • The grant assistance has no interest, no repayments as long as conditions hold (grant).  
  • The second mortgage is deferred, often with 0% interest (or very low/zero) until a triggering event.  
  • Loan amount caps: up to $25,000 or certain % of first mortgage.  



Repayment / When amounts are due:

For grant: no repayment.  
For second mortgage: repayment is deferred until one of events such as:

  • Sale of home
  • Refinance of first mortgage
  • Payoff of first mortgage
  • Home no longer being primary residence  

 


Other important points:

  • The assistance can also cover closing costs in many cases.  
  • There are purchase price limits / appraised value limits depending on county.  
  • The home must be owner-occupied, primary residence.
     



 CONTACT A CHFA PARTICIPATING LENDER TODAY! 


Disclaimer: "CHFA does not lend money directly to consumers. We use approved lenders to qualify customers and make all mortgage loans." Information and terms are subject to change. McGarry Home Team does not guarantee the accuracy of this information. Contact a professional.


Last Updated: 09/18/2025


Learn more about CHFA



Colorado Homebuyer Programs



Pikes Peak Down Payment Assistance (DPA)



Eligible loan types / Assistance types:


Works in conjunction with first mortgages: FHA, VA, USDA-RD, and also conventional (via Freddie Mac HFA Advantage) loans.  
The assistance is a second mortgage (soft second/forgivable) for down payment and closing costs.



 

Eligibility requirements:

  • No first-time homebuyer requirement.  
  • Income limits apply: e.g., up to $174,440 for FHA/USDA/VA loans; lower for conventional depending on AMI.  
  • Minimum FICO scores: FHA 660; VA, USDA, conventional (Freddie Mac) 640.  
  • Must meet lender requirements (credit score, debt-to-income, etc.). 



Fees, interest rates, terms:

  • Assistance amount: up to 5% of the first mortgage/loan amount for down payment / closing costs.  
  • Interest rate: 0% on the second mortgage.  
  • Term: 30-year deferred second mortgage.  


 

Repayment / Forgiveness:

It’s forgivable over time:

  • 50% forgiven during first 5 years, if still meeting conditions.  
  • Remaining 50% forgiven at the end of the 30-year term.  

If the home is sold, or if you stop using it as your primary residence (or other triggering events), then the balance may become due. Typically the deferred second is due upon sale, refinance, or if no longer primary residence. (That’s standard for many deferred DPA programs; Pikes Peak’s specific rules follow this pattern.)  



Other important points:

  • Has a Hometown Heroes (HTH) add-on grant (an additional 1%) for qualifying professions
    • To qualify for the Hometown Heroes program, a borrower must be employed full-time (defined by the employer) and employed in a qualified profession listed below:


1. Qualifying Education Professions

  • Be currently employed in a K-12 public, charter, private, parochial or it’s school district.
  • Administrators, Deans and Counselors, Office Staff, School Psychologists, School Social Workers, School Nurses, School Lunchroom Staff, School Paraprofessionals, School Coaches, School Custodians and Maintenance Staff, School Librarians and Media Specialists, School Bus Drivers, School Office Staff


2. Qualifying First Responder Professionals

  • Firefighters, Probationary Firefighters, EMT’s, Paramedics, Drivers Engineers, Fire Dispatchers, Field Chiefs, Lieutenants, Captains, Fire and EMT office staff, Fire and EMT maintenance staff, Volunteer Firefighters, Police Officers, Detectives, Bailiffs, Corrections Officers, Detention Deputies, Border Patrol Agents, Crime Scene Technicians, Criminologist, Crime Lab Analysts, Parole Officers, Dispatchers, Park Rangers, Law Enforcement Office Staff, Substance Abuse Counselor.


3. Qualifying Healthcare Professionals

  • Nurses (RN, LPN, NP), Respiratory Therapists, CNA’s, Doctors, Medical Assistants, Medical Staff, Specialists, Orthodontist, Endoscopy/Radiology Techs, Lab Techs, Chiropractors, Dentists, Hospital Employees, Pharmacists.


4. Veterans and Active Military – Full-time employment requirement waived.

  • Served or currently serving in any branch of the US Military, Served or currently serving in the Colorado National Guard, Veterans must provide DD214. A Certificate of Eligibility is not accepted in lieu of the DD214. Veterans cannot have been dishonorably discharged.

 


 CONTACT A DPA PARTICIPATING LENDER TODAY! 


Disclaimer: Information and terms are subject to change. McGarry Home Team does not guarantee the accuracy of this information. Contact a professional.


Last Updated: 09/18/2025


Learn more about DPA



Colorado Homebuyer Programs



Colorado Housing Assistance Corporation (CHAC)




Eligible loan types / Assistance types:


Provides second mortgages / mortgage assistance, not first mortgages. The assistance is used to cover down payment and closing costs.



Two main assistance options:

  • Down Payment Assistance Grant – grant (no repayment) up to the lesser of $25,000 or 3% of the first mortgage.  
  • Second Mortgage Loan – up to the lesser of $25,000 or 4% of the first mortgage. Repayment is deferred until a triggering event (sale, refinance, payoff, or home ceases to be primary residence).  

 


Eligibility requirements:

  • Legal residents.  
  • First-time homebuyers generally (haven’t owned a primary residence in past 3 years).  
  • Primary residence requirement (must live in home).  
  • Income limits vary by county. All income sources and all household members counted.  
  • Borrower must contribute at least 1% of the purchase price of their own funds (not gift), except for disability program where the minimum is smaller (e.g. $750)  
  • Property eligibility: must meet health and safety standards; lead paint inspection for homes pre-1978; property must not have been tenant-occupied within 90 days prior to closing.  


 


Fees, interest rates, terms:



Program Loan Amount / % of Price  Interest & Rate Term / Repayments
Statewide Program – Immediate Payback Up to 6% of sales price or appraised value (whichever is less), capped at $12,000. 3% interest rate. Amortized over 360 months (30 years). Payments begin immediately.
Statewide Program – 5-Year Deferred Same cap (≤ 6%, up to $12,000) 0% interest for first 5 years; after that 5% interest for remaining 25 years. Payments begin after deferral period; amortized over the remaining term.
Disability Program Max $10,000 assistance. 0% interest / very low APR (often 1%) with deferred payments. Usually deferred for 30 years or due upon sale/transfer.


Fees may include things like commitment fees, document preparation fees, recording fees, wiring fees, title fees, service fees (small monthly).


Repayment / When amounts are due:

For “immediate payback” program: payments start immediately (monthly) over full term (30 years).  
For deferred programs: payments start after the deferral period (e.g. 5 years), or full repayment on sale, refinance, or if the home is no longer primary residence. For disability program, full repayment typically upon sale or transfer.  


 


Other important points:

  • The CHAC assistance is a second mortgage / lien on the property. It will affect your closing & combined liens.  
  • The borrower must complete both a homebuyer education class and a CHAC counseling session.  
  • Funding availability matters: some programs may have limited funds or waiting periods.
     



 CONTACT A CHAC PARTICIPATING LENDER TODAY! 


Disclaimer: Information and terms are subject to change. McGarry Home Team does not guarantee the accuracy of this information. Contact a professional.


Last Updated: 09/18/2025


Learn more about CHAC

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