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City of Longmont, Affordable Housing Programs

Boulder County Down Payment Assistance Program, Frequently Asked Questions


The below questions and answers are to provide general information on the Boulder County Down Payment Assistance Program. Further requirements apply. For more information contact Molly McElroy at 303-774-4648, or molly.mcelroy@ci.longmont.co.us.
  1. What is the Boulder County Down Payment Assistance Program?
  2. Does a homebuyer have to be a first-time homebuyer?
  3. How much down payment can a homebuyer receive?
  4. Does a homebuyer have to income-qualify for the Program?
  5. What are the requirements to qualify for the Boulder County Down Payment Assistance Program?
  6. If more than one person will be listed on the mortgage and/or title do they all need to be first-time buyers?
  7. Are non-occupying co-borrowers allowed for the Boulder County Down Payment Assistance Program?
  8. How much money does a homebuyer have to contribute?
  9. Why can’t a homebuyer get subprime, interest-only, adjustable-rate or other “non-traditional” mortgages?
  10. Can homes purchased through the Boulder County Down Payment Assistance Program be rented?
  11. What is the source of funding for the Boulder County Down Payment Assistance Program?

1. What is the Boulder County Down Payment Assistance Program?

The Boulder County Down Payment Assistance Program is a loan to help first-time homebuyers purchase a home in Boulder County (outside the Boulder City limits). This program is administered by the City of Longmont. This is a loan up to 8.5% of the purchase price of a home, the maximum loan amount is $15,000. This loan can help first-time homebuyers with down payment and closing costs.

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2. Does a homebuyer have to be a first-time homebuyer?

Yes. The definition of a first-time homebuyer is someone who has not owned a home in the past three years. An exception may be made for those who have been divorced within the past three years and lost their home due to the divorce.

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3. How much down payment can a homebuyer receive

The down payment assistance loan is up to 8.5% of the purchase price, maximum loan amount of $15,000.

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4. Does a homebuyer have to income-qualify for Boulder County Down Payment Assistance Program?

Yes. Household income may not exceed 80% of the Area Median Income (AMI) based on household size for Boulder County. This number is determined annually by the Department of Housing and Urban Development (HUD). Households may also not exceed the program’s asset limits, which are typically the same amount as the income limits.

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5. What are the requirements to qualify for the Boulder County Down Payment Assistance Program?

In addition to being income and asset-eligible for the program, all homebuyers must submit a completed application form and attend a homeownership training course. A homebuyer must also be preapproved by the lender of his/her choice. The City does not allow subprime, interest-only or adjustable-rate mortgages. The final piece of the application process is for the homebuyer to meet with a housing counselor who reviews their mortgage to ensure that it meets the City’s requirements and is also appropriate for the homebuyer’s situation. All of these steps help ensure that households cannot only purchase a home but can sustain homeownership. Once a homebuyer has completed the application process and has been determined income and asset-eligible, they may sign purchase contract on a home.

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6. If more than one person will be listed on the mortgage and/or title do they all need to be first-time buyers?

Yes. Anyone who will be listed on the mortgage and title of the home must be a first-time buyer in order for the household to qualify, unless they are a non-occupying co-borrower. Anyone listed on the mortgage and/or title of a home will be listed on the City’s deed of trust and promissory note for the loan and will be legally responsible for the repayment of the down payment assistance loan.

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7. Are non-occupying co-borrowers allowed for the Boulder County Down Payment Assistance Program?

Yes. Non-occupying co-borrowers are allowed. The co-borrower must provide the Program with a letter stating that they will not be living in the house and their income will not be contributing to the house payments. A co-borrower will be listed on the City’s deed of trust and promissory note for the loan and will be legally responsible for the repayment of the down payment assistance loan.

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8. How much money does a homebuyer have to contribute?

As of February 1, 2009, all homebuyers are required to contribute at least $2,000 of their own funds towards the purchase of a home. This may be in the form of earnest money or for any costs paid for outside of closing. A homebuyer may not receive any cash back at closing.

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9. Why can’t a homebuyer get a subprime, interest-only, adjustable-rate or other “non-traditional” mortgages?

The intention of the Down Payment Assistance Program is to help households not only become homeowners but also remain homeowners. Generally, homeowners who receive “non-traditional” type of financing have a more difficult time sustaining homeownership than homeowners who receive prime loans. Subprime loans may charge a higher interest rate and higher fees that will require the homeowner to make a higher monthly payment than a prime loan. Interest-only loans may lower a homeowner’s monthly payments but will limit the amount of equity a homeowner can gain over time because the principal loan amount is not being reduced. Adjustable-rate mortgages may cause the homeowner’s monthly payments to increase over time, with the potential for those payments to be more than a household can handle.

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10. Can homes purchased through the Boulder County Down Payment Assistance Program be rented?

While a household has a down payment assistance loan with the City, the home cannot be rented out. The homeowner may have roommates but the property must be the homeowner’s primary residence. The property may be rented out once the entire down payment assistance loan has been repaid. This is only applicable if the owner purchased a market rate home and does not apply if the owner purchased a home through the Community Housing Program.

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11. What is the source of funding for the Boulder County Down Payment Assistance Program?

Funding originally came from the Community Development Block Grant (CDBG) and HOME Programs, federally funded grants to the City of Longmont. Currently, the main source of funding for the loan comes from program income. When homeowners with down payment assistance loans pay back their loan, that money is re-lent to other first-time buyers. The City also receives periodic funding from the Colorado Division of Housing as well as local City funding from the CDBG and HOME Programs.

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