07/16/2026
You raised them. You watched them work hard. And now they can't afford a home in the state they grew up in.
You're not alone in feeling that — and you're not alone in wanting to do something about it.
This article covers exactly what Colorado parents can do to help their adult children buy a home, from gifting a down payment to selling them your own house at a discount. The options are real, the programs exist, and more families are using them than you might think.
First, the Numbers That Explain Why It's So Hard
The median age of a first-time homebuyer in the U.S. has hit 40 years old — an all-time high, and nearly double what it was a generation ago.
In Colorado specifically:
Median home price: $604,600
Median down payment: $104,000
First-time buyers: just 21% of the market — the lowest on record
The math simply doesn't work for most young earners on their own. Colorado's median household income is around $87,000. A $600,000 home requires a salary that most people in their late twenties and thirties don't have — yet.
Student debt, thin credit histories, and a shortage of starter homes pile on top of the price problem. It's not a motivation issue. The ladder got longer.
You'd Be in Good Company
Nearly 40% of all homeowners received financial help with their down payment, according to a 2026 LendingTree survey. Among Gen Z homeowners, that number is close to 80%.
A quarter of all first-time buyers rely on gifts or loans from family to close the deal.
Helping your child buy a home isn't a bailout. It's how homeownership works now.
FIVE Ways You Can Help
Here's a plain-language breakdown of your options.
*Give Them the Down Payment
The most direct route. In 2026, each parent can gift up to $20,000 per year to any individual with no gift tax return required — $40,000 combined for a couple. Larger gifts don't automatically mean you owe taxes; they just count against a lifetime exemption that most families never come close to hitting ($13.99 million per person).
The lender will ask for a simple gift letter confirming the money doesn't need to be repaid.
*Co-Borrow With Them
If your child's income or credit isn't enough to qualify on their own, you can go on the loan with them as a non-occupant co-borrower— you don't have to live in the home. Your income and credit history strengthen their application. You're legally on the hook if payments are missed, so go in with eyes open, but for many families this is the bridge that makes everything work.
*Lend Them the Money
You can act as a lender for part of the down payment or the full purchase price — setting terms, interest rate, and payment schedule. The IRS requires a minimum interest rate (the Applicable Federal Rate, currently well below commercial mortgage rates) and a written promissory note. Done right, it's a win-win: they pay less than a bank would charge, and you earn more than a savings account pays. In this scenario, the minimum 3%-5% down payment cannot be a loan and must be paid in the form of a gift or cash, but anything above 3-5% can be your loan.
*Buy the Home for Them
Under Fannie Mae's Family Opportunity Mortgage, a parent can purchase a home that their adult handicapped or disabled child will live in — and finance it at owner-occupied rates, not the higher investment property rates. You get the better rate; they get a home.
* Sell Them Your Home at a Discount
This one surprises a lot of people — and it's one of the most powerful tools available.
A gift of equity happens when you sell your home to your child for less than its appraised value. The difference between what it's worth and what they pay becomes their down payment — instantly, without them needing any cash savings.
A simple example: Your home appraises at $600,000. You sell it to your child for $480,000. That $120,000 gap is the gift of equity. From the lender's perspective, your child just made a 20% down payment. No PMI. Lower monthly payment. Zero cash at closing for the down payment.
Even a small discount goes a long way. Sell a $600,000 home for $585,000 — just 3.5% less — and your child satisfies the entire FHA minimum down payment requirement.
Every major loan type accepts this: FHA, conventional (Fannie Mae, Freddie Mac), VA, and USDA all allow gifts of equity in family transactions. The paperwork required is straightforward: an independent appraisal, a gift of equity letter, and a closing disclosure that reflects the credit.
The tax side: A gift of equity is treated as a gift under IRS rules. The same annual and lifetime exclusions that apply to cash gifts apply here. For most families, there's no tax owed. One thing to keep in mind: your child's future capital gains will be calculated from the discounted purchase price, not the full appraised value — worth a conversation with a tax advisor, but not a deal-breaker.
Why this works especially well in Colorado: If you bought a Denver-area home in 2005 for $250,000, it may be worth $500,000 or more today. That appreciation isn't just your retirement asset — it can be the foundation your child builds their financial future on. A gift of equity lets you pass that wealth directly, efficiently, and without writing a check.
A Few Things to Think Through First
None of this requires you to put yourself at financial risk — but it does require honest conversations.
Talk about it openly. Is the money a gift or a loan? What happens if they miss payments? How does this fit into your retirement plan and, if relevant, your other children's expectations?
Know your exposure. Co-borrowing puts your credit on the line. Buying a home in your name means carrying two housing obligations. Go in informed.
Get the right lender. Not every loan officer knows these programs well. The Family Opportunity Mortgage, gift of equity transactions, and non-occupant co-borrowing all require specific experience. Ask directly whether they've done these before.
The Bottom Line
Colorado's housing market has changed in ways that make it genuinely difficult for young buyers to get started without help. The good news is that the options for parents who want to help have never been more varied or more accessible.
Whether you gift a down payment, co-sign a loan, sell them your home at a discount, or use the Family Opportunity Mortgage to buy on their behalf — the tools are there. The question is just which one fits your family's situation.
That's a conversation worth having. And it's one we're happy to help you think through.
Questions? We're North Suburban Mortgage — a Colorado mortgage team that works with families on exactly these kinds of situations. Reach us at 303.594.9861 or [email protected].
This article is for informational purposes only and does not constitute financial, legal, or mortgage advice. Consult a licensed mortgage professional, CPA, or attorney for guidance specific to your situation.
