There are many financial goals to strive for throughout life and one of the most impactful is building generational wealth. This is the ability to pass down your assets to a member of your family, so they may have greater opportunity for financial stability and possibly continue the cycle for the next generation. 

How does homeownership contribute?  

There are several ways to build generational wealth, including saving, investing in stocks, bonds and other funds, and business ownership. Investing in homeownership is typically one of foundational ways to build and pass down wealth because it is usually the largest purchase you will ever make, and generally real estate appreciates over time. 

Some ways homeowners contribute to generational wealth are to gift a home to a family member during their lifetime, leave a home to an heir in their will, or use cash from a home sale to gift to a family member so they can use it for college, their own home purchase, or other purpose that provides them a financial head start.

How to strategically invest in homeownership

If you would like to use homeownership as a pathway to building generational wealth, consider certain factors:

How long do I plan to live in the home? 

• This affects the amount of equity and appreciation that may be earned. Generally, the longer you live in a home, the more equity you will build.

How do I want to use my asset to benefit another? 

• Do you want to be able to pass the home on to someone else when you downsize, leave it in your will, or another strategy? 
• Consult with a professional such as a qualified estate planning attorney to discover the options and determine the best course of action that best fits their goals.  

How will decisions as a homeowner affect my generational wealth building strategy? 

• Think about the customizations you make, the importance of maintenance, and how refinancing or other financial decisions may affect your long-term goals.

For more tips on building generational wealth, check out Forbes’ “Closing the Generational Wealth Gap: Five Ways to Build Wealth.”

In July, CHFA began its public rollout of the CHFA FirstGeneration^sm home mortgage program, supporting borrowers who have never owned a home and whose parents or guardians never owned a home during the borrower’s lifetime. Those who have lived in the foster care system and never owned a home are also eligible. The program offers a fixed-rate 30-year mortgage alongside up to $25,000 in down payment assistance. As of July 31, 2024, 73 loans have been reserved through the program. Borrowers’ self-reported demographics information is included below.

With respect to its programs, services, activities, and employment practices, Colorado Housing and Finance Authority prohibits unlawful discrimination against applicants or employees on the basis of age 40 years and over, race, sex, sexual orientation, gender identity, gender expression, color, religion, national origin, disability, military status, genetic information, marital status or any other status protected by applicable federal, state or local law. Requests for reasonable accommodation, the provision of auxiliary aids, or any complaints alleging violation of this nondiscrimination policy should be directed to the Nondiscrimination Coordinator, 1.800.877.2432, TDD/TTY 800.659.2656, CHFA, 1981 Blake Street, Denver, Colorado 80202-1272, available weekdays 8:00am to 5:00pm.