COLORADO SPRINGS, Colo. (KOAA) — A new Colorado program is designed to help full-time public school employees overcome one of the biggest hurdles to homeownership: the upfront cost.
The Colorado Housing and Finance Authority, or CHFA, launched its Schools to Home Program in July. The program provides down payment and closing-cost assistance to eligible full-time employees of Colorado public schools. CLICK HERE FOR MORE ON THE PROGRAM.
That includes more than just teachers.
“This program specifically benefits Colorado public school employees,” said Mike Rex, a Realtor with Rex Homes. “Full-time employees — they don't need to be teachers. They can be administrators, teachers, bus drivers, anyone who works for a Colorado public school on a full-time basis.”
According to CHFA, eligible employees can work for a pre-K through 12 Colorado public school, school district, charter school, board of cooperative educational services or other qualifying public-school organization.
The program provides down payment and closing-cost assistance through a second mortgage that can be up to 25% of the first mortgage amount. The second mortgage has no monthly payment and repayment is deferred until the end of the loan term or certain events, such as selling or refinancing the home or no longer using it as a primary residence. The program also includes a shared-appreciation component.
Rex said that assistance can make a significant difference for buyers struggling to come up with the money needed to purchase a home.
“It's expensive nowadays to get your foot in the door, but with a sizable down payment of up to $100,000, you're eliminating mortgage insurance,” Rex explained. “You're eliminating the need to use your own nest egg to purchase the home. And you're possibly lowering your interest rate with a sizable down payment.”
The program is not limited to first-time homebuyers. However, applicants cannot currently own a home. Rex said the program is particularly significant for public school employees who may otherwise have difficulty fitting a home purchase into their budgets.
“As we know, public school employees are underpaid. They do hard work and this really kind of bumps their buying power tremendously and allows them to purchase a comfortable home in a great neighborhood where maybe they can stay for 30 years if they choose,” Rex added.
The program is funded through an investment from Colorado's Public School Permanent Fund. The Colorado General Assembly authorized CHFA to develop and manage the shared-appreciation down payment assistance program.
Rex is offering a free virtual webinar Wednesday, Sept. 30, at 7 p.m. to explain the program, eligibility requirements and how the assistance works. CLICK HERE TO REGISTER.
Rex said potential buyers should consider learning about the program sooner rather than later because funding is limited.
“The Colorado Housing and Finance Authority has been in existence since the 1970s. They do programs every year, but there are times where the program runs low or runs out of money,” Rex said. “So my advice to folks is if you're in a position where you're thinking about buying a home, at least investigate and talk to us and see what the opportunities are and if they're a good fit for you at this particular time.”
CHFA also requires participants to complete a financial commitment course and quiz, along with a CHFA-approved homebuyer education class.
Rex said his team recently helped close a mortgage using the new program.
“Because right now, the money is there,” Rex said. “Our lending team closed a mortgage last week using this program.”
More information about eligibility, program requirements and participating lenders is available through CHFA.
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