Legislation to Create More Affordable Home Ownership Opportunities Passes Committee

SB26-040 would modernize the Prop 123 Affordable Homeownership Program to better meet families’ needs

DENVER, CO – Bipartisan legislation to update the Affordable Homeownership Program created by voter-approved Proposition 123 passed the Senate Local Government and Housing Committee today.

SB26-040, sponsored by Senator Judy Amabile, D-Boulder, would expand eligibility for qualified buyers and make practical updates to better serve every Colorado community and meet the reality of the 2026 housing market.

“The Affordable Homeownership Program was designed in 2022, for a 2022 market with low interest rates and lower construction costs than what we see today,” said Amabile. “This bill updates the program to reflect today’s reality and provide the flexibility that Coloradans need. We’re taking a practical approach to make sure this program works as intended so more Colorado families can put down roots and achieve their dream of homeownership.”

The bill, also sponsored by Senate Minority Leader Cleave Simpson, R-Alamosa, would increase the allowable income threshold to qualify for the program to less than or equal to 120 percent of statewide Area Median Income (AMI) or the local AMI. This would allow more people to qualify for the program, particularly in rural communities.

Rising interest rates and insurance costs have also made it harder for Coloradans to meet the requirement that combined housing costs cannot exceed 35 percent of their income. This bill would create a process to allow some homeowners to spend more than 35 percent of their income on housing when a qualified buyer is not found after six months of advertising. 

Additionally, the bill would allow eligible organizations to temporarily rent units if they cannot be sold in a timely manner and create more flexibility in the program rules. These updates would help ensure that the program is working as intended and serving as many Coloradans as possible. 

SB26-040 now heads to the Senate floor for further consideration. Track its progress HERE.