The Federal first time home buyer's tax credit has gotten lot of attention this year, but states like Colorado have incentives out there for new homeowners as well. . At this time, the $8,000 credit has been extended until next April and expanded to include current home buyers, but the state programs for Denver home buyers can often be used in conjunction with the U.S. government program. Not all of the programs are confined to first time buyers.
First, Colorado through the Colorado Housing and Finance Authority (CHFA), offers fixed rate 30 year loans at market rates to homeowners on first and second mortgages through a statewide network of lenders. Part of the intent of the program is to educate buyers to be fiscally responsible, so new buyers must take the CHFA U First Time Homebuyer course while other borrowers must complete the online CHFA U Money Management course. CHFA offers the Home Opener program for first mortgage and the Home Open Plus program to help pay the down payment and closing costs. Both programs are good for any price home but have income limits. For the Home Opener Plus program, the borrower must pay $1,000 out of his own pocket. For the Denver metro area, the income ceiling is $76,000 for a one person household, $89,000 for two persons, and $98,800 for three or more; for income limits elsewhere in Colorado, click here.
CHFA Mortgage Credit Certificate (MCC) program allows homeowners to claim 20% of their interest as a dollar for dollar tax credit on their Federal income tax returns, with the 80% going to the Schedule A deduction. The program has income and purchase price limits, but targeted areas based on census tracts have higher limits. With Denver County and Denver City, there are 45 qualifying areas. The MCC program, which is also good on refinanced property, is in effect until the home is sold and no longer used as a primary residence. If the home is sold within 10 years and other conditions apply, you might have to pay back some of the credit.
To facilitate coming up with the down payment on homes where the borrower was planning to use the $8,000 credit, Colorado offers the JumpStart Tax Credit Loan program. This loan is interest free if paid back by June 10, 2010 or 8% thereafter.
The State also offers two specialized programs: CHFA HomeAccess and CHFA SectionEight and SectionEight Plus Homeownership Programs to help disabled and low income persons. HomeAccess applies to People with disabilities or parents of a child with a disability; the other aids people who have lived in Section 8 housing for at least one year. Both programs have a second mortgage option to assist with down payment and closing costs.
Coloradoans can qualify for most of these programs with lower credit scores than most conventional loans will accept. Some critics of the programs feel that people are enabled to buy a home sooner than they can really afford to. Most of the programs have an educational requirement plus a credit score requirement to prevent them from getting in over their heads.
If you are interested in exploring how to buy a home with these programs, the pros at Bandy Homes can help you find an affordable home in the Denver metro area or the City of Denver.
Marianne Bandy
Denver - A Great Place to Relocate
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