An aqueous polymer composition is provided containing select levels of hard polymer and soft polymer, wherein the hard polymer and the soft polymer are contained as dispersed particles. Portions of the hard polymer and optionally, the soft polymer, have select chemical groups. The aqueous polymer composition also contains composite particles formed from pigment particles and a plurality of polymer particles having the select chemical groups. The aqueous polymer composition is useful for preparing coatings having a combination of improved hiding, low temperature film formation, and hardness properties, such as dirt pickup resistance. Methods to prepare and to use the aqueous polymer composition are also provided.