Colorado will launch a pilot program to issue low-interest bonds to housing developers building for-sale homes under a new law signed on Thursday by Gov. Jared Polis. 

The measure, Senate Bill 6, is the latest effort by lawmakers to combat rising housing costs that they say have pushed homeownership out of reach for many Coloradans. 

The median statewide price for a single-family home is $599,000 and $407,000 for a townhouse or condo, according to an April report from the Colorado Association of Realtors. Prices are highest in mountain resort areas, where median costs can hover in the multi-millions. 

“We all know that affordable housing continues to be a challenge in our state and especially in our mountain communities, where the cost of living is so much higher,” said Sen. Dylan Roberts, D-Frisco, during a bill signing ceremony at Copper Mountain Resort. 

“We have to do everything we can to retain the workforce that makes our communities great, whether it’s ski areas like Copper Mountain or our school districts, our hospitals, our law enforcement agencies, and everybody else,” Roberts said. 

SB 6 directs the Colorado Treasurer’s Office to invest up to $50 million in state-issued bonds to affordable housing developers. The bonds — a type of loan — would come with below-market interest rates to help developers create new housing sold at or below 140% of the area median income. 

Roberts, a lead sponsor of SB 6, said while the state has made investments in all forms of housing, including rental units, his measure is focused exclusively on for-sale homes. 

“This is about homeownership opportunities and making sure that people can buy that first home, put down roots in a community, and build generational wealth,” he said. 

He believes the investment could lead to the construction and mortgage assistance of around 200 homes. He’s hoping, however, that the true impact will be much greater if the bonds can also stimulate private investment. 

Elyse Howard, a board member for Habitat for Humanity of Colorado, said low-interest loans will give developers, including nonprofits, wiggle room to leverage even more funding for projects.  

Howard said Colorado has a track record of delivering more housing when funding is available. She points to how the state used federal stimulus funds during the COVID-19 pandemic to issue grants for affordable housing initiatives. 

Howard, who also serves as Habitat for Humanity Vail Valley’s director of development, said the money helped the group double its home production between 2022 and 2024, adding that other regional Habitat organizations saw similar results. 

“You can see what the influx of capital did for units around the state,” she said. “When there’s a bigger investment, we build more. And so I have no reason to believe that this (bond) opportunity wouldn’t create the same impact.” 

With federal stimulus money now dried up and the state facing what is expected to be a multi-year budget deficit, lawmakers were hard pressed to find money for new programs this year. 

Many of the housing bills that passed this legislative session instead focused on policy reforms, but with the same goal of creating more units, such as by reducing legal risk for condominium developers and streamlining building codes for modular homes. 

State leaders hailed SB 6 as a creative funding solution. 

The law doesn’t allocate money from the state’s general fund, which serves as its discretionary spending account and was the source of deep cuts this year. Instead, it taps reserves in the state treasury.

“This session, there wasn’t as much fiscal flexibility,” Polis said, “but (SB 6) is a bill that was able to use fiscal flexibility to find an additional $50 million to finance affordable homes.” 

Roberts said he hopes the program can grow, calling SB 6 “just the first step.” 

“I think, in the coming years, we’ll be going back to the state treasure and saying, ‘This has been so successful, it’s helping the economy, it’s helping Coloradans, let’s keep doing this,” he said. 

SB 6 is also sponsored by Reps. Mary Bradfield, R-Colorado Springs, and Manny Rutinel, D-Commerce City.