Kelly KossmanUnderstanding CHFA Loans at a Glance
If you’re looking to buy your first home or secure affordable financing, Colorado Housing and Finance Authority (CHFA) loans are worth checking out. They’re designed to help buyers overcome common hurdles — like high down payments or tough credit conditions. But before you celebrate, there’s a crucial piece to understand: occupancy requirements.
CHFA loans aren’t meant for flipping houses or renting out vacation cabins. They’re specifically designed to support owner-occupants, which means you actually need to live in the property. If you’re curious about CHFA loan basics, check out CHFA Loan Basics for a deeper dive.
Why Occupancy Rules Matter in CHFA Loans
Ever wondered why CHFA cares where you sleep at night? These occupancy rules ensure the program benefits real homeowners — not investors trying to make a quick buck. When you apply, lenders want proof that you’re serious about living in the home, not just cashing in on special rates. For guidance on starting your application, you can review the CHFA application process.
1. The Property Must Be Your Primary Residence
A CHFA loan isn’t a golden ticket to pick up rental properties. It’s strictly for homes you’ll personally occupy. Whether you’re eyeing a charming bungalow or a suburban townhouse, it needs to be the place you hang your hat.
Check out Affordable Housing and Affordable Mortgage resources to understand why this focus on owner-occupied properties matters.
Owner-Occupancy vs. Investment Property
So how do lenders tell the difference? If your plan is to rent out the property immediately, that’s a red flag. CHFA loans are for people who need housing, not those who want to become landlords overnight.
2. Occupancy Must Begin Within 60 Days of Closing
You can’t just buy a house with a CHFA loan and let it sit empty. Lenders expect you to move in within 60 days after closing. It’s like buying a car and immediately driving it — you need to use what you’ve paid for.
Why Timing Is Non-Negotiable
CHFA wants to confirm your intent to live there right away. If you’re unsure how to plan your move, look for loan application tips to avoid delays that could violate the terms.
3. Borrowers Must Intend Long-Term Residence
Buying with CHFA isn’t just about getting in the door. You need to intend to live there long-term. This doesn’t mean you’re locked in forever, but flipping the house within months could look suspicious.
How CHFA Monitors Occupancy Intent
Lenders sometimes verify your address after closing. Utility bills, mail forwarding, or even a quick drive-by can confirm you’re living there.
4. Non-Occupant Co-Borrowers Restrictions
Some buyers want a parent or relative to co-sign. While helpful for qualifying, CHFA limits non-occupant co-borrowers in many programs to ensure the actual borrower can handle the loan.
Who Qualifies and Who Doesn’t
If someone won’t live in the home but co-signs, it may disqualify certain loan programs. Learn more about these restrictions under CHFA loan requirements.
5. Multi-Unit Properties Have Special Rules
Yes, you can buy a duplex, triplex, or fourplex with a CHFA loan — but you must live in one unit. Renting out all units would violate the occupancy agreement.
Living in One Unit While Renting Others
This is actually a great way to reduce your mortgage costs while meeting CHFA requirements. For more strategies like this, explore tips and strategies.
6. Temporary Absences Have Limits
CHFA understands life happens — maybe you’re away for work or taking care of family. But long absences can raise red flags if they make it look like you don’t live there anymore.
What Counts as Acceptable vs. Problematic
Short trips? No problem. Moving out for six months without plans to return? That could violate occupancy terms. For advice on what to do, see loan dos and don’ts.
7. Occupancy Certifications Are Required
When you close, you’ll sign documents confirming you plan to live in the home. This occupancy certification is your official promise to CHFA.
Signing Off on Where You Live
Failing to follow through on what you sign can have consequences. More on these forms can be found in loan documents guides.
8. CHFA Requires Occupancy Affidavits
In addition to certifications, you might complete affidavits verifying occupancy. This is another layer of honesty checking built into the process.
Why Honesty in Affidavits Matters
Lying on these forms is considered mortgage fraud. If you’re confused about paperwork, check mortgage paperwork resources to stay compliant.
9. Borrowers Cannot Use CHFA Loans for Vacation Homes
Dreaming of a mountain cabin? If it’s not your main home, CHFA won’t approve the loan. Their goal is helping residents, not funding getaways.
How This Impacts Second Home Buyers
Want a vacation property later? You’ll need a different loan type. Look at mortgage programs to explore other options.
10. Violation of Occupancy Rules Can Trigger Penalties
Breaking occupancy agreements can lead to loan default, repayment demands, or even legal action. CHFA takes this seriously.
The Financial Risks of Non-Compliance
Aside from penalties, misrepresenting your occupancy can ruin your credit. To avoid costly mistakes, review mortgage advice and step-by-step guides.
Key Takeaways on CHFA Loan Occupancy
- You must live in the property as your primary residence.
- Move in within 60 days of closing.
- Long-term residency is expected.
- Non-occupant co-borrowers are limited.
- Multi-unit homes require you to live in one unit.
- Temporary absences have restrictions.
- Certifications and affidavits confirm your occupancy.
- No vacation homes — primary residence only.
- Violations can trigger serious penalties.
For more details, explore the eligibility criteria and benefits programs pages.
Conclusion
CHFA loans are an amazing opportunity if you’re ready to settle into a home you’ll actually live in. These 10 occupancy requirements aren’t just fine print — they’re the heart of the program’s mission to help people achieve affordable homeownership. Treat these rules seriously, and you’ll not only stay compliant but also enjoy the full benefits of your CHFA mortgage.
FAQs
1. Can I rent out a room in my CHFA-financed home?
Yes, as long as you live there too. Renting out a spare bedroom is usually fine.
2. What happens if I can’t move in within 60 days?
Contact your lender immediately. Delays may require documentation or risk breaking the terms.
3. Can I refinance later if I move out?
Possibly — but discuss with your lender to ensure it doesn’t conflict with CHFA requirements.
4. How does CHFA verify my occupancy?
They may request utility bills, tax records, or perform address checks.
5. Are co-signers ever allowed?
Sometimes, but non-occupant co-borrowers are limited. Check the specific program rules.
6. Can I use a CHFA loan for a duplex?
Yes — if you live in one of the units yourself.
7. What’s the penalty for lying about occupancy?
Violations can lead to loan default, repayment demands, or even legal consequences.