Aurora launches new down payment assistance program as demand surges
The City of Aurora has launched a down payment assistance program designed to help more residents become homeowners, and early interest suggests demand is high.
The program offers qualifying buyers between 4% and 10% of a home's purchase price to help cover upfront costs. For a typical Aurora home priced around $400,000, that translates to roughly $18,000 to $40,000, according to city officials.
"This assistance is possible through the Prop 123 funds that were voted on by the residents of Colorado in 2022," said Sarah Pulliam, Aurora's housing and community development manager.
Pulliam said the program is aimed at addressing one of the biggest barriers to homeownership: saving for a down payment while paying rising rent.
"As we all know, rents are very high here in the city of Aurora and across Colorado," Pulliam said. "When you're paying high rent, you don't have the ability to save $18,000 to $40,000. It would take years, probably, to do that."
Eligible buyers can earn up to 120% of the area median income. In the Denver metro area, that includes households earning up to about $168,000 for a family of four. Pulliam said the city expects most participants to fall between 80% and 120% of AMI.
The assistance is provided as a deferred, silent second loan, meaning buyers do not make monthly payments on it. Instead, repayment is triggered when the homeowner sells the property, refinances, or no longer uses the home as their primary residence.
"They will eventually have to pay this money back," Pulliam said. "This is meant to be paid back so that other households can utilize these funds to become homeowners as well."
Buyers must also meet standard lending requirements, including debt-to-income limits. Pulliam said the maximum back-end debt-to-income ratio is 45%, meaning total housing and other debt cannot exceed 45% of a buyer's gross income.
Aurora received $720,000 in grant funding for the program from the Colorado Department of Local Affairs. Pulliam said the city hopes the money will assist at least 24 households, though the final number will depend on home prices and loan amounts.
Interest has been strong. Within the first week, Pulliam said 125 households entered the application queue, with 14 applications already fully submitted.
"It's been very popular," she said. "That level of interest shows there is a high desire to be a homeowner in the city of Aurora."
The program is first-come, first-served, but applicants must be approved by a lender, select a qualifying home within Aurora city limits, and meet all program requirements.
Local real estate agent Nelson Galicia of PAK Home Realty said down payment assistance programs like this can be transformative for renters who feel homeownership is out of reach.
"A lot of people stop themselves from buying because they think they don't qualify or they don't have the savings," Galicia said. "This is going to be life-changing for a lot of people."
Galicia said Aurora remains one of the more accessible markets in the metro area, with home prices generally ranging from the $400,000s into the $700,000s, depending on location and schools.
"Even 4% doesn't sound like a lot, but when you're trying to save for a house, it's huge," he said. "Instead of paying $2,500 or $3,000 a month in rent, you're putting that money into your own investment."
Pulliam said the strong response could help the city secure additional funding in the future.
"We applied for $1.2 million and were awarded $720,000," she said. "This level of interest shows the state there is a real need, and we'll be applying for more funding."
Residents interested in applying or seeking additional details can contact the program team by emailing brcarter@auroragov.org or calling 303-739-7900.
More information will also be shared on the city's website.