Planning numbers
Every program below pays at closing. The difference is the bill at the end. Use this table before you pick one.
| Program | Form | What you owe at sale or refinance |
|---|---|---|
| CHFA Schools To Home | 0% deferred second, up to 25% of the first mortgage | Full amount plus a share of appreciation |
| CHFA Colorado Champions | 0% deferred second, lesser of $25,000 or 4% | Full amount, no appreciation share |
| CHFA SmartStep grant | Grant, lesser of $25,000 or 3% | Nothing |
| metroDPA | 0% 30-year second, never forgiven | Full amount |
| Pikes Peak DPA | 0% soft second, up to 5% | Whatever is not yet forgiven |
| Colorado Roots | Up to 10% of price, max $50,000 | Full amount plus the same share of appreciation |
| Dearfield Fund | Up to 20% of price, max $50,000 | Principal, plus the lower of 8% or a pro-rata gain share after 18 months |
Schools To Home: the formula, step by step
CHFA built this program for full-time public school staff. It is funded by the Public School Permanent Fund, and repayments go back into that fund. That is why it carries a gain share.
- Find your share. Divide the assistance by the original purchase price.
- Find the gain. Subtract the original price from the sale price. At a refinance or payoff, CHFA uses the appraised value instead.
- Multiply. Your share times the gain is the appreciation payment.
- Add the principal. You repay the full assistance on top.
CHFA's own example: $87,500 of help on a $437,500 home is a 20% share. The home sells for $480,000, a $42,500 gain. Twenty percent of that is $8,500. Total owed: $96,000.
Two rules shape the result. If the home does not gain value, the appreciation payment is zero. And CHFA does not subtract your selling costs, such as agent commissions, before it measures the gain.
Sizing the share on purpose
You do not have to take the full 25%. Every dollar you skip lowers your share of future gains. Here is the same $437,500 home at three assistance levels, sold for $480,000 (illustrative):
| Assistance | Share | Gain payment | Total due |
|---|---|---|---|
| $30,000 | 6.9% | about $2,914 | about $32,914 |
| $60,000 | 13.7% | about $5,829 | about $65,829 |
| $87,500 | 20% | $8,500 | $96,000 |
The trade-off is the first mortgage. Less help means a larger first loan, a higher monthly payment and, above 80% loan-to-value, mortgage insurance. Run both payments side by side with a lender. Our what would I owe tool handles the gain math.
Repaid at face value: Champions and metroDPA
CHFA Colorado Champions serves peace officers, firefighters (paid or volunteer), EMTs, dispatchers, corrections, port of entry and wildlife officers. The second mortgage charges no interest and takes no share of your gain. You repay exactly what you borrowed when you sell, refinance, pay off the first loan or move out.
metroDPA works the same way for Front Range buyers. Its second is a 0% 30-year loan that is never forgiven. It comes due on sale, refinance, payoff or move-out.
Planning note: a face-value second is easy to budget. If you borrow $20,000, plan for $20,000 to come out of your sale proceeds, no matter what prices do.
Forgiven on a schedule: Pikes Peak DPA
Pikes Peak DPA covers all of El Paso County. Half of the assistance is forgiven pro rata over the first 60 months. The other half is forgiven at 30 years. Selling or refinancing early means paying back the part not yet forgiven.
| Months in the home | Share still owed (illustrative) |
|---|---|
| 12 | 90% |
| 36 | 70% |
| 60 to 359 | 50% |
| 360 | 0% |
El Paso County says the program is not a bond program, so the federal recapture tax does not apply to it.
Gain-share loans from nonprofits
Impact Development Fund runs two statewide shared-equity funds. Colorado Roots lends up to 10% of the price, capped at $50,000, to first-time or first-generation buyers at 50% to 120% of area median income. It covers cities and counties with a Proposition 123 filing. At sale you repay the loan plus a matching share of appreciation: a 10% loan means 10% of the gain.
The Dearfield Fund lends up to 20% of the price, capped at $50,000. Pay it off within 18 months and you owe only principal. After that, you owe principal plus the lower of 8% or a pro-rata share of appreciation. Dearfield pairs only with a Fannie Mae conventional or portfolio first mortgage.
Local versions follow the same idea. Boulder's H2O loan and HomesFund in southwest Colorado both take a share of the gain sized to the loan.
One more possible bill: federal recapture tax
CHFA FirstStep is funded with tax-exempt bonds. Buyers who use a bond-financed loan can owe a federal recapture tax if they sell within 9 years. Per the IRS Form 8828 instructions, three things must all be true: you sell at a gain, your income in the year of sale is above the limit in your notice, and the formula produces a positive amount. The tax is capped at 50% of the gain. Most buyers owe nothing. Refinancing without selling does not trigger it.
Which exit fits your plans
- Planning to sell within five years: a face-value second or a grant keeps your exit cost fixed.
- Planning to stay a long time: Pikes Peak forgiveness grows in value. A gain share costs more the longer prices rise.
- Need the most cash at closing: Schools To Home's 25% can be the largest number on the table, so take only what you need.
Write down your likely hold time, then compare two or three programs on the same home. When you know which ones you fit, check your eligibility.
Questions
Is Schools To Home free money?
No. It is a 0% second mortgage with no monthly payment. You repay it in full when you sell, refinance, pay off the first loan or stop living there, plus a share of any gain equal to your assistance divided by the purchase price.
What if my home loses value?
For Schools To Home, the appreciation payment is zero when there is no gain. You still repay the assistance itself.
Does Colorado Champions take a share of my home's value?
No. Champions is repaid at the amount you borrowed, with no interest and no appreciation share.
How does Pikes Peak DPA forgiveness work?
Half is forgiven pro rata over the first 60 months and the rest at 30 years. If you sell or refinance before then, you repay the part not yet forgiven.
Will I owe recapture tax?
Only if you used a bond-financed loan such as CHFA FirstStep, sell within 9 years at a gain, and earn above the limit in your notice. The tax is capped at 50% of the gain.
Other guides
- Which first mortgage goes with each CHFA program?
- How do lenders count overtime for Colorado firefighters, deputies and dispatchers?
- How do lenders read school-year pay for Colorado school staff?
- How do you budget for a first home in a high-price Colorado market?
- How much do metro district taxes add to a new Colorado home?
- What should first-time buyers check about a Colorado HOA?
- What rules apply to first-time buyers in Colorado mountain towns?
- How do deed-restricted and land trust homes work in Colorado?
- How does wildfire risk affect home insurance for Colorado buyers?
Check what you qualify for
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