CHFA grant vs CHFA second mortgage — Denver scenario broken down
Program figures verified July 2026 — details change; confirm your scenario with us.
Colorado's CHFA offers two DPA structures: a grant up to 3% (never repaid) and a second mortgage up to $25,000. The right choice depends on your cash position, your timeline, and your loan amount.
The CHFA Preferred Plus Grant
CHFA Preferred Plus structures the DPA as a true grant — no second mortgage, no lien, no repayment. The tradeoff: the grant's cost is built into the loan's pricing rather than repaid by you — compare both structures' current CHFA terms on the same day to see the real difference for your scenario.
On a $400K Denver purchase with 3% grant, you get $12,000 in immediate cash help. The trade-off: a higher monthly payment for the life of the loan.
The CHFA Second Mortgage
CHFA's second mortgage variants offer up to $25,000 in assistance as a 0% interest second with no monthly payment. The balance is due when you sell, refinance, or pay off the first mortgage. It is deferred, not forgiven — repayment waits until you sell, refinance, pay off the first mortgage, or stop living in the home.
First mortgage carries standard CHFA pricing. Larger DPA, but the second lien sits on title until paid.
Denver $400K scenario — side by side
| Item | Grant (Preferred Plus 3%) | Second Mortgage $25K |
|---|---|---|
| Loan amount (first) | $388K | $388K |
| DPA amount | $11,640 grant | $25,000 second |
| Monthly payment | Typically higher (grant cost built into pricing) | Typically lower (standard pricing) |
| DPA savings | $11,640 (no payback) | $25,000 (payback at sale) |
| Five-year picture | Keep the $11,640 — nothing to repay | Larger help now; the $25,000 is owed when you sell, refinance, or pay off |
Which to pick
- Buy + sell within 3-4 years: Grant — second mortgage payoff would erase savings.
- Buy + hold 7+ years: Second mortgage — the lower rate compounds significantly.
- Cash-strapped at close: Second mortgage — more DPA to bridge the cash gap.
- Want lowest possible monthly payment: Second mortgage (lower rate).
- Want maximum simplicity: Grant — one mortgage on title, no second to subordinate.
Common questions
Can I refinance my CHFA loan with the second still in place?
The CHFA second can sometimes be subordinated to a new first mortgage. Confirm with CHFA at refi time.
Are these programs limited to first-time buyers?
Yes for most variants — defined as no homeownership in past 3 years. Some targeted-area exceptions exist.
Are mountain counties eligible?
Yes, but income and purchase price limits differ by county. Summit, Eagle, and Pitkin have higher limits than Denver.
What about CHFA SmartStep vs FirstStep?
Different variants with different income tier targeting. We map you to the program with the best fit before quoting.
How Mike + Cornerstone help
I'm licensed in Colorado. I structure CHFA scenarios for Denver, Boulder, and Colorado Springs buyers regularly. The grant-versus-second decision depends on your timeline and how long you'll keep the loan — we run both structures with your real numbers, on the same day's CHFA terms, before you choose. We model both before recommending.
Talk to Mike first Get pre-approved
No pressure, no commitment. Free 20-minute consult. Mike will look at your scenario and tell you straight whether this works for you.