This is part of the Denver Home Financing Guide→ [Denver Home Financing Guide]

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CHFA loans best serve moderate-income Denver buyers needing down payment help, FHA suits lower-credit profiles with flexible underwriting, and conventional excels for strong-credit households seeking long-term cost savings. Each aligns with specific submarket realities, credit situations, and holding horizons in the metro’s $450k-$850k price bands, where metro district taxes and inventory scarcity shape total affordability. Buyers qualify faster by matching loan type to profile, while sellers target pre-approved pools for smoother closings.

Key Differences at a Glance

Feature	CHFA (FirstStep/Preferred)	FHA	Conventional (97 or 5% down)
Min Down	3-3.5% + $1k min own funds	3.5% (580+ FICO)	3-5% (620+ FICO)
Credit Floor	620	580	620
Income Limits	Yes ($104k-$174k metro)	None	None
MI/PMI	FHA-style + DPA second	Lifetime (1.75% upfront)	Removable at 20% equity
Max Loan	$806k Denver metro	$806k	$806k (higher conforming)
Best For	First-timers w/ DPA need	Lower credit/DTI	Strong credit, long hold

Denver 2026 limits; assumes 6.25% rates, excludes metro taxes.

When CHFA Makes Sense

CHFA wraps FHA or conventional loans with 3-5% grants or seconds for income-qualified buyers under $174,400 (4-person household). A $550,000 Aurora townhome requires just $1,000 cash after $25,000 assistance, with deferred seconds adding only $100/month initially. Mandatory education ensures commitment, ideal for first-timers navigating metro district taxes in Parker or Centennial. Avoid if planning short holds, as early sales trigger repayment of assistance funds.

When FHA Dominates

FHA’s 580 FICO floor and 56% DTI tolerance fit self-employed buyers or those with past credit dings targeting $400k-$600k Englewood fixers. Up to 6% seller concessions cover closing costs, but lifetime mortgage insurance (0.55% annual) adds $150/month versus conventional PMI. FHA appraisals scrutinize new construction incentives carefully, making it perfect for spec homes but risky for unapproved condos common in RiNo.

When Conventional Wins

Buyers with 680+ FICO and reserves putting 5% down on $750k Highlands Ranch ranches save long-term through removable PMI (drops at 20% equity, typically year 7) and cleaner appraisals. No income caps suit dual-income professionals; 15-year terms at 5.875% accelerate payoff. Flexible underwriting handles self-employment better than CHFA’s rigid limits, though 43% DTI caps exclude high earners stretching for $900k.

Denver Submarket Fit and Tradeoffs

Aurora/Englewood ($450k-$550k): CHFA/FHA drive 35-45% of sales—grants unlock townhomes amid metro taxes.
Highlands Ranch/Parker ($700k-$900k): Conventional only, as income caps exclude families.
Denver Core ($600k condos): FHA handles historic property quirks; conventional offers speed.

Monthly PITI ($600k, 6.5%, 20% down excluded for comparison):

• CHFA/FHA: $3,950 ($200 second + MIP)
• Conventional 5%: $3,780 (PMI drops to $0 by year 8)

Strategic Decision Framework

• Minimal savings (<$20k), 580-640 FICO: CHFA/FHA for maximum leverage
• Moderate income ($100k-$160k household): CHFA grants over FHA MIP
• Strong credit (680+), reserves: Conventional PMI path to $0 insurance
• Short hold (<5 years): FHA for concessions, low barriers
• 10+ year investment: Conventional equity acceleration

Sellers favor CHFA/FHA pre-approvals in starter tiers for velocity, conventional in upper brackets for clean funding.

For buyers, sellers, or relocating homeowners choosing CHFA vs. FHA vs. conventional in Denver—reach out to me. I can run side-by-side PITI models with metro taxes, match to submarkets, and connect optimal lenders for your Denver real estate goals.​

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