Colorado Springs sits in an awkward spot for first-time buyers: a single-family median around $503,700 against assistance programs with income caps that were not designed for that price. The good news is that El Paso County runs one of the more accessible down payment programs in the state — with no first-time buyer requirement and no purchase price cap.
The catch is in the forgiveness schedule, and it is worth understanding before you sign.
The Colorado Springs market
The Pikes Peak Association of REALTORS reported a July 2026 single-family and patio home median of $503,700 for El Paso County, essentially flat against July 2025. Condos and townhomes came in at a median of $305,000, down noticeably from a year earlier.
That condo softness is worth paying attention to. If the single-family median is out of reach, the attached-housing segment has moved in your favor.
Pikes Peak Down Payment Assistance (PPDPA)
Run by the El Paso County Housing Authority, this covers all of El Paso County including Colorado Springs, and it is unusually accessible.
- Up to 5% of the loan amount for down payment and closing costs.
- A 0% interest soft second mortgage — a forgivable loan, not a grant.
- No first-time buyer requirement. Repeat buyers are welcome, which is rare.
- No maximum purchase price — notable given the local median.
- Income limits: $178,920 with FHA, VA or USDA financing; $92,560 with the Freddie Mac HFA Advantage conventional product.
- Homebuyer education is encouraged for everyone but required only for first-time buyers using the conventional product.
- Funds are described as continuously available until further notice.
The forgiveness schedule — read this twice
PPDPA does not forgive evenly. Half the assistance forgives gradually over the first 60 months, at 1/60th per month. The other half forgives only at the end of the 30-year term.
In practice that means if you sell in year seven, the first half is fully forgiven and you still owe the entire second half. That is a very different outcome than a straightforward five-year forgivable loan, and it is the single most important detail in this guide. If there is any chance you will move within a decade, price that repayment into your decision.
CHFA — the state programs, and the grant worth asking for
Colorado Housing and Finance Authority offers first mortgages (FirstStep, SmartStep, Preferred, HomeAccess, FirstGeneration and others) plus two very different assistance products.
CHFA Down Payment Assistance Grant — a true grant
The lesser of $25,000 or 3% of your first mortgage, and you never repay it. On a $400,000 first mortgage that is $12,000 of genuinely free money. This is the product to ask about first.
CHFA Second Mortgage Loan — not a grant
The lesser of $25,000 or 4% of the first mortgage — and first-generation buyers or buyers with permanent disabilities can access up to $25,000 regardless of first mortgage size. But it carries interest and is deferred, not forgiven. It comes due when your first mortgage is paid off, or when you sell, refinance, or stop using the home as your primary residence.
The 4% option is larger than the 3% grant, which makes it tempting. Run the numbers on both — free money at 3% often beats borrowed money at 4%.
CHFA limits for El Paso County
Effective June 15, 2026:
- SmartStep and Preferred: income up to $127,800 for one or two people, $146,970 for three or more.
- FirstStep and FirstGeneration: income up to $153,360 for one or two people, $178,920 for three or more.
- Very Low Income Program (VLIP): $57,850 for one or two people.
- Target area limits: $153,360 and $178,920.
- Purchase price limits: $566,730 non-targeted, $692,670 targeted.
Homebuyer education is required, available online or in person through Colorado counseling agencies.
The squeeze worth naming
Notice the gap: the single-family median is $503,700 and the CHFA purchase price cap is $566,730. That leaves very little headroom in a market where a competitive offer often lands above asking.
Meanwhile the conventional income cap on PPDPA is $92,560 — well below what it realistically takes to carry a median-priced Colorado Springs house. The practical effect is that most assisted buyers here end up in the FHA or VA lane rather than conventional, which means accepting FHA mortgage insurance that lasts the life of the loan at low down payments.
None of that makes buying impossible. It does mean the condo and townhome segment, and the FHA path, deserve serious consideration.
The city and other options
The City of Colorado Springs does not run its own down payment assistance program. It directs HOME funds to Rocky Mountain Community Land Trust (shared-equity homeownership) and Pikes Peak Habitat for Humanity (sweat equity for first-time buyers). Both are legitimate paths to ownership, but neither is a down payment assistance product.
Colorado Housing Assistance Corporation (CHAC) is a statewide nonprofit offering low-interest second loans, but its published materials mix 2025 and 2026 references and list no loan amounts or terms. Verify current availability by phone before counting on it.
Frequently asked questions
Do I have to be a first-time buyer for Pikes Peak DPA?
No. The Pikes Peak Down Payment Assistance program has no first-time buyer requirement and no maximum purchase price, which makes it unusually accessible compared with most assistance programs.
How does Pikes Peak DPA forgiveness work?
It is a two-tier schedule that catches people out. Half the assistance forgives gradually over the first 60 months at 1/60th per month; the remaining half forgives only at the end of the 30-year term. Selling in year seven means you still owe the entire second half.
What is the difference between the CHFA grant and the CHFA second mortgage?
The Down Payment Assistance Grant is the lesser of $25,000 or 3% of your first mortgage and is never repaid. The Second Mortgage Loan is the lesser of $25,000 or 4%, but it carries interest and is deferred rather than forgiven — due on sale, refinance or payoff.
What are the income limits in Colorado Springs?
Pikes Peak DPA allows up to $178,920 with FHA, VA or USDA financing, but only $92,560 with the Freddie Mac conventional option. CHFA limits for El Paso County range from $127,800 to $178,920 depending on the program and household size, effective June 2026.
Does the City of Colorado Springs offer down payment assistance?
No. The city directs its HOME funds to Rocky Mountain Community Land Trust and Pikes Peak Habitat for Humanity instead. For down payment assistance, use the county-run Pikes Peak program or CHFA.