metroDPA: You can get assistance up to a percentage of the home loan (first mortgage loan) amount for your down payment in the form of an interest-free, 3-year forgivable second mortgage – there are no scheduled payments and you don’t have to pay the assistance loan (second mortgage) back if you stay in the home for three years.

You must use a metroDPA-approved lender to obtain a 30-year fixed rate home loan (first mortgage) in order to receive down payment assistance. The mortgage may be an FHA, VA or USDA loan or a conventional loan and will be determined in cooperation with your lender.

The assistance loan is in the form of a second mortgage, which creates a lien on the property for a specific amount of time. In this case, the amount of time is three years after the date of closing on the home. The loan is forgiven over a three year period. You may sell or refinance your home before the end of the three years and only repay the unforgiven portion.

Over the first three years (36 months) of ownership, the down payment assistance is forgiven 1/36th each month. After the third anniversary (36 months) of closing, you will not have to repay any portion of the assistance you received. If you sell or refinance before the 36 months is up, you must pay back the remaining portion of the loan.

Here is an example: A borrower received $10,000 in assistance and 28 months after closing they decide to refinance their home. They are going to owe back a portion of the assistance they received. Remember, the assistance is forgiven at 1/36th per month which means, in month 28 after closing, $7,777 of the $10,000 amount has been forgiven. So, the borrower will owe $2,223 when they refinance or sell their home.

metroDPA: A homeowner may receive assistance up to a percentage of their home loan (first mortgage amount) based upon the loan product (FHA, VA, USDA or conventional). As an example, if a borrower was to purchase a home and their loan amount was $300,000, if they use the FHA loan product and receive up to a percentage of down payment and closing cost assistance, the borrower would receive $15,000 to be used as down payment and closing cost assistance.
The homeowner must use a home loan (first mortgage loan) provided through the metroDPA program.

The assistance may be used for the down payment required by FHA, Conventional, USDA and VA loans. The assistance may also be used for customary closing costs, pre-paids or principal reduction of the home loan. The assistance may not be used to pay the difference between the sales price and appraised value, any borrower’s debt, any portion of the realtor compensation or result in cash back to the homeowner(s).

Promoting homeownership in our community can help build generational wealth, strengthen the Front Range, and bring stability to its residents.