The Colorado Housing and Finance Authority has a new mortgage program aimed at preventing foreclosures.
The CHFA HomeStretch Program offers a conventional mortgage with a 40-year fixed-rate term to either buy or refinance a home. The program, offered through participating lenders, targets people who have interest-only or adjustable-rate mortgages or are considering using those financing tools to buy a home.
A 40-year loan can save the borrower more than $100 a month compared with a 30-year loan.
“The spirit of this program is to keep people out of those inappropriate mortgages or to help people who are in them get out,” said Dan McMahon, business-development manager for the CHFA.
The program also offers a zero percent second mortgage to help homebuyers with down payments and closing costs.
“There are a lot of borrowers out there who might be able to refinance but have little or no equity and can’t do it because they can’t afford closing costs,” said Cindy Howeth, senior mortgage consultant with First Priority Home Loans, a division of Universal Lending.
Loans will be insured with up-front, lender-paid mortgage insurance provided by Genworth Mortgage Insurance or Mortgage Guaranty Insurance Corp.
“It’s built into the loan, so it’s tax deductible,” CHFA director Karen Harkin said.
There are income restrictions for people participating in the program, but there are no limits for purchase price or home value.
Income restrictions are based on where the homebuyer lives. In Denver, for example, a single person can earn up to $71,300 to qualify, while a family of three can earn up to $92,600. In Boulder, a single person can earn up to $81,600, while a family of three can earn up to $106,000.
All first-time homebuyers are required to complete an education class before closing their loans. Borrowers using the refinance option must complete the CHFA’s online money-management course.
For more information on the CHFA’s programs, visit www.colohfa.org.
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
