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Fort Collins First Time Home Buyer Loans

Apply to Get a Mortgage Loan to Buy Your First Home in Fort Collins, CO
Down Payment Assistance - Best Program Options - Low Interest Rates

Fort Collins, CO – First Time Home Buyer Programs

Are you looking to purchase your first home? Our first time home buyer programs might be the perfect solution to help you obtain the financing you need to purchase the home you desire. We provide excellent home financing options, and encourage you to compare our offered loan terms to other mortgage lenders.

Fort Collins, CO – First Time Home Buyer Loans

There are 5 types of first time home buyer loans.  You may select different loan terms, such as a fixed rate or adjustable rate mortgage, and the number of years to repay the loan (such as a 30 year fixed rate mortgage).

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any loan that does not meet the conforming or FHA loan limits is a jumbo loan.  Fort Collins is part of Larimer County, which the FHA loan limits for as follows:  Single unit: $437,000.  Two units: $559,450.  Three units: $676,200.  Four units: $840,400.  For conforming loans, which are used for conventional and VA loans, the maximum loan limits are:  Single unit: $484,350.  Two units: $620,620.  Three units: $749,650.  Four units: $931,600.  If you want to buy a more expensive home, and have the income to qualify, we provide what are known as jumbo loans up to $2,000,000.

The above 5 types of loans are the main first time home buyer options that exist.  We can help you determine which loan is the right fit for you based on your particular needs and eligibility.

First Time Buyer Application

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Fort Collins Down Payment Assistance Programs and Grants 

Home to Colorado State University, Fort Collins is the fourth most populated city of the state. Originally a military outpost founded in 1864, it has grown into a thriving town continually ranked as one of the top places to live in America. Beyond collegiate jobs, the city is also home to Hewlett Packard, Anheuser-Busch and OtterBox. To preserve the natural beauty of the surrounding mountains and plains, the FortZED movement is working toward a city that uses renewable energy almost exclusively.

Along with its beautiful climate, For Collins is a desirable place to live, no matter one’s income level. Just because not everyone can afford to simply pick up and purchase a home in the area doesn’t mean it’s an exclusive city. In fact, there is local help designed to assist those that want to live there but do not necessarily make enough to buy a home outright.

Home Buyer Assistance
Fort Collins offers its income-eligible residents loans that partially cover down payments and closing costs for those that have not been on a home title in three years. This loan is then expected to be paid back in full if the home is rented, sold, transferred or a second loan is taken. That being said, eligible households can only be awarded up to 5% (up to $15,000) of the property’s total cost.

The process starts with those interested in assistance taking a home ownership class offered through Neighbor to Neighbor. Founded in 1970 in Fort Collins, Neighbor to Neighbor is a foundation of Larimer County that helps prevent homelessness and foreclosures while continuing to educate the community in regards to caring for and maintaining their properties responsibly. The class is entirely free. Due to limited space, attendees must register in advance. Luckily, there are quite a few options, with one class usually scheduled on the third Saturday of each month. It should be noted that this class is expected to be attended prior to closing, and the online class option does not count.

Following the successful completion of this class, the loan then looks at the type of housing in question. All units save for mobile homes on rented land are eligible. Further requirements include:

  • The property must be located within Fort Collins city limits.
  • The appraised value and purchase price has to be less than $361,000.
  • Should the property have been occupied in the past 90 days, potential borrowers must reach out to the City of Fort Collins to determine if it is still eligible.

Once the property is determined to fit the requirements, the process then moves on to the borrower. For this, income limits are enforced with limits that are based on the total number of people in the household.  For instance, one person means a limit of $47,700 while eight people means a limit of $89,900. Beyond this, total housing expenses cannot exceed 38% of a family’s gross income and the family’s total debt cannot be more than 42% of this income. There is also a $20,000 limit on gift funds and buyer contributions unless special approval is sought.

Other various guidelines include that the owner must deposit the greater amount of either $1,000 or 1% of the purchase price with their own money. The home must be used as the main residence so long as the loan is in effect. If the house is not used this way, the loan is immediately forfeit and must be paid off in full. The City Staff has to inspect the property to confirm its livability and any home built prior to 1978 has to have an inspection for lead-based paint.

Unfortunately, the Fort Collins Home Buyer Assistance program does have limited funds meaning it is awarded on a first-come, first-served basis. The year for them begins in November and runs until the funds are depleted, closing everything off until the following November.

Want to learn more?  Visit the official website for the City of Fort Collins.

CHFA Down Payment Assistance Grant
Available for all residents of Colorado, the CHFA DPA Grant awards qualified applicants with a grant of up to 3% of the first mortgage loan as a way to help cover down payments or closing costs. The best part is that, since it is a grant, it never has to be paid back. The money is the borrower’s to do with as they will. Like the HBA, it does come with an income requirement based on the Fort Collins location within Larimer County and the number of people within the household.

Fort Collins First Time Home Buyer Tax Credits

The Mortgage Credit Certification (MCC) tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios.  How this works, is you can deduct up to $2,000 off your federal tax bill each year.  The MCC allows up to 35% of your annual interest to be eliminated (with the cap being at $2,000).  Some great news, is this can be used in addition to standard mortgage interest deductions!

First Time Buyer Application

It is easy to get a quote for your first home loan!

Frequently Asked Questions About Buying Your First Home

How much do I need for a down payment?
It depends on the type of loan you want.  USDA and VA loans often will not require any down payment.  FHA loans require a 3.5% down payment.  Conventional loans typically require either 3% or 5%.  If you receive down payment assistance, you may not need any money for your down payment.

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Do you have first time home buyer loans for bad credit?
Yes, we offer mortgage options for borrowers with bad credit. This includes FHA loans for bad credit, which you can possibly be approved with a credit score as low as 500. However, a 580 credit score is required for the 3.5% down payment. If your credit score is between 500-579, then you will need to put 10% down.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I know if I am ready and prepared to own a home?
It is critical to consider the often unexpected expenses of buying a home. This includes repairs, maintenance, and of course furnishing the home, monthly utilities, and all other expenses that are associated with homeownership. A common mistake is to just look at the difference in rent to your total mortgage payment. Almost every year, you can expect to have to pay for various upkeep to keep the property functional. This can include anything from repairing a hot water heater that broke, to landscaping, and various maintenance.

Something else financial consultants advise is that you have at least 3 months of reserves. This means that you could afford to make your new mortgage payment for at least 3 months in the event that you lose a job or have some other unforeseen circumstance that the savings would be needed for. This is not a requirement for most home loans, but it is good advice to consider.

Have more questions about buying your first home?  Give us a call at 1-800-731-3560.

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