Buying in Fort Collins but worried your down payment is out of reach? You’re not alone. Many local buyers are surprised to learn how many programs can help with upfront costs, from state-backed options to lender credits and employer support. In this guide, you’ll learn what down payment assistance looks like in Larimer County, how eligibility works, which programs you can combine, and the exact steps to move forward with confidence. Let’s dive in.

What down payment assistance means for you

Down payment assistance (DPA) is money that helps cover your down payment and sometimes closing costs. It can come as a grant you don’t repay, a deferred second mortgage, or a forgivable second that disappears after a set time if you meet the rules. In Fort Collins, DPA can bridge the gap between what you’ve saved and what you need to close, while keeping your monthly budget in check.

Your best fit depends on your income, the property you’re buying, your loan type, and how long you plan to live in the home. The sections below outline what’s available locally and how to match a program to your plan.

Main DPA options in Fort Collins

CHFA statewide programs

The Colorado Housing and Finance Authority (CHFA) is the most common statewide source of assistance. CHFA programs are paired with a CHFA first mortgage through an approved CHFA lender. They typically come as grants, deferred second mortgages, or forgivable seconds, and may be paired with Mortgage Credit Certificates (MCCs) when available. Program names, assistance amounts, and limits are updated regularly, so you’ll want to verify current details with CHFA or a CHFA-approved lender.

Federal low or no down payment loans

• FHA: Allows a 3.5% minimum down payment. You can combine eligible DPA and gift funds to help with upfront costs.
• VA: For eligible veterans and service members, VA loans can offer no down payment. Some DPA can still be used for closing costs.
• USDA: Offers 100% financing for eligible buyers and qualifying properties in designated areas, subject to income and location rules.

These federal options change how much assistance you actually need and which programs can be combined with your first mortgage.

Local city and county initiatives

The City of Fort Collins and Larimer County sometimes use federal or local housing funds to offer buyer assistance. These programs may prioritize local residents or workers and typically include income limits, purchase price caps, and required homebuyer education. Local funding and rules can change each year, so always confirm current availability and timelines.

Lender-based credits and grants

Many banks and credit unions offer their own DPA grants, lender credits, or affordable loan products. These often require using that lender for your first mortgage and meeting certain underwriting criteria. Amounts and eligibility vary, so compare options and ask about overlays or product-specific rules.

Employer-assisted housing

Some large Fort Collins employers, including universities and healthcare systems, may offer housing assistance to employees. These benefits can be grants or favorable loans and may include retention or occupancy requirements. Ask your HR team if your employer participates and what is required to enroll.

Nonprofit programs and education

HUD-approved housing counseling agencies and local nonprofits may provide small grants, matched savings programs, or referrals to available assistance. They also deliver the homebuyer education many programs require. Counseling can help you compare options, prepare a budget, and get your documentation in order.

Eligibility basics in Larimer County

Most assistance programs share common rules. Expect to see the following:

• Income limits tied to Area Median Income (AMI): Programs often set eligibility at a percentage of Larimer County AMI, adjusted for household size. Common caps include 80%, 100%, 115%, or 120% of AMI.
• Purchase price or loan limits: Some cap the home’s price or the first mortgage amount, while others cap assistance as a percentage of price.
• First-time buyer status: Many programs define this as no homeownership in the past three years, though some offer exceptions for certain occupations or situations.
• Property requirements: Most allow single-family homes, townhomes, and condos approved by your loan program. Homes must be owner-occupied. Investment properties are not eligible.
• Homebuyer education: A certified class or counseling session is often required before closing. Keep your certificate current within the program’s required timeframe.
• Documentation and lawful status: Expect to document income, assets, household size, and citizenship or eligible immigration status.
• Repayment structure: Understand if the assistance is a grant, a deferred second mortgage repayable at sale or refinance, or a forgivable second that disappears after a set period. Ask for the exact repayment triggers in writing.

How DPA fits with your mortgage and offer

Underwriting and documentation

Your lender verifies every dollar used at closing. DPA must meet specific program rules to count toward your down payment or closing costs. Plan to document gift letters, grant awards, or second-lien terms and keep your lender updated on any changes to your financing.

Stacking and compatibility

Not all programs can be combined. Many DPAs must be used with a specific first mortgage, and some prohibit multiple subordinate loans. CHFA assistance is typically paired with a CHFA first mortgage and can be compatible with FHA, VA, or USDA depending on the product. Mortgage Credit Certificates can sometimes be layered for tax benefits. Confirm stacking rules early so your pre-approval reflects your final structure.

Crafting competitive offers with DPA

Using DPA does not automatically weaken your offer. To reassure sellers in a competitive market, consider these moves:

• Get a full lender pre-approval tailored to your final loan and DPA structure.
• If possible, include proof of DPA reservation or commitment with your offer.
• Align timelines so appraisal, inspection, and DPA approvals fit the contract schedule.
• Use strong, realistic terms like a clear inspection window and solid earnest money within your risk tolerance.

Seller credits can often help with closing costs up to program limits, but they cannot count as your down payment. Your agent can help structure the offer to stay within program caps and keep your financing predictable.

Where to verify details in Fort Collins

Program names, limits, and funding change frequently. Before you lock anything in, verify current rules with:

• Colorado Housing and Finance Authority (CHFA)
• U.S. Department of Housing and Urban Development (HUD) for AMI and counseling agencies
• VA, FHA, and USDA for loan eligibility and property rules
• City of Fort Collins Housing & Neighborhood Services for local assistance
• Larimer County housing or community services for county-administered funds
• HUD-approved housing counseling agencies and local nonprofits in Northern Colorado
• CHFA-approved lenders, local credit unions, and community banks active in Fort Collins

Step-by-step next moves

1. Price your target homes and estimate your needed down payment and closing costs for Fort Collins neighborhoods you like.
2. Check Larimer County AMI and note the income limit that applies to your household size.
3. Review CHFA programs and confirm which first mortgage and DPA option might fit your situation.
4. Contact a HUD-approved housing counseling agency for education requirements and local DPA referrals.
5. Ask your employer’s HR team about any employee housing benefits or grants.
6. Get pre-approved by a lender experienced with Colorado DPA, ideally a CHFA-approved lender if using CHFA.
7. Complete your homebuyer education and keep your certificate handy for your lender and program administrator.
8. When you make an offer, include your lender pre-approval and any DPA reservation or commitment to show strong, stable financing.
9. Before closing, get your DPA terms in writing: amount, structure (grant, deferred second, forgivable second), lien recording, and payoff triggers.

Common mistakes to avoid

• Assuming you earn too much or too little: AMI-based limits vary by program and household size. Check the current grid before ruling anything out.
• Waiting to verify stacking rules: Confirm compatibility between your first mortgage and DPA early to avoid last-minute surprises.
• Overlooking education requirements: If a class is required, schedule it early so it does not delay closing.
• Ignoring repayment triggers: Know whether a second lien is due at sale or refinance and how that affects future plans.
• Presenting a weak offer: Ask your lender and agent to package your financing clearly so sellers see a smooth path to close.

Ready to explore homes and make a strong plan? As a local advisor, I’ll help you coordinate lenders, education, and offer strategy so you can compete with confidence in Fort Collins.

If you’re thinking about buying soon, let’s talk through your timeline, budget, and the neighborhoods that fit your goals. Reach out to Unknown Company to start a low-pressure, practical conversation and map your next steps.

FAQs

What is down payment assistance for Fort Collins buyers?

• DPA helps cover part of your down payment and closing costs using grants, deferred second mortgages, or forgivable seconds that pair with your primary mortgage.

Who qualifies for DPA in Larimer County?

• Eligibility depends on income compared to Larimer County AMI, household size, purchase price or loan limits, first-time buyer status for some programs, and property and occupancy rules.

Can I combine DPA with FHA, VA, or USDA loans?

• Often yes, but it is program-specific. Some DPA options are designed to pair with conventional, FHA, VA, or USDA first mortgages. Confirm compatibility with your lender and the program administrator.

Will DPA add a monthly payment to my mortgage?

• Grants and many forgivable seconds do not add monthly payments. Deferred second mortgages usually do not require payments until you sell, refinance, or reach a set date. Always get terms in writing.

Does using DPA hurt my chances in a competitive offer?

• Not if your financing is well prepared. A strong pre-approval, clear DPA documentation, and aligned timelines can make your offer competitive and predictable for sellers.

Do I need a homebuyer education class to get DPA?

• Many programs require a certified education course or counseling before closing. Schedule it early so your funding and closing stay on track.