Q: I am a resident of Colorado and will be buying my first home. I have a mid-level income and am having difficulty scrapping together a down payment.

Are there grants to assist with the down payment for first-time home buyers in Colorado?

A: All states offer some sort of home buyer assistance. Whether you qualify depends on where you live, and how much money you earn. Typically, with a middle-level income, you won’t qualify for a whole lot of down payment assistance. But, it never hurts to ask.

Check also with the housing authority for the city closest to where you live, or where you want to live. Sometimes, cities like Denver or Chicago offer programs specifically for residents or residents who move into certain parts of cities, or who buy different types of housing units. In Chicago, for example, you can get cash assistance if you buy a bungalow, because the city wants to preserve them.

If you can’t get down payment assistance, you might get a below-market mortgage, which offers a lower interest rate and zero fees.

You might also check with your house of worship for any down payment assistance programs.

But just because you don’t have any cash for the down payment doesn’t mean you can’t buy a house. It does mean you have to be careful to choose a loan you can live with.

One option is an 80/20 loan, which is an 80 percent first mortgage with a 20 percent second mortgage. Both loans will be at a higher than average rate because you’re borrowing all of the cash. Check out different mortgage brokers, including your credit union (if you belong to one), as well as a local bank and national lenders like Countrywide, Bank of America and Wells Fargo to compare offers.

In general, I’d love to see you find a way to put some cash in a savings account. Owning a house costs money, and maintenance and repair costs can cripple a budget. Consider getting a short-term second job in order to fund your downpayment and future maintenance budgets.

Aug. 24, 2006.