House keys next to a model home, illustrating that a 20% down payment isn't always required for conventional loans.

If you’re thinking about buying a home in Colorado, you’ve probably heard this one:

“You need 20% down to get a conventional loan.”

Here’s the truth: You don’t.

This is one of the most common myths I hear from buyers and it holds a lot of people back from getting into a home sooner. So let’s clear it up.

What’s the Minimum Down Payment for a Conventional Loan?

Most conventional loans require as little as:

The 20% figure is tied to avoiding private mortgage insurance (PMI) not to qualifying for the loan itself.

You can absolutely get a conventional mortgage with less than 20% down, you’ll just pay a bit more each month for PMI, which can later be removed once you build enough equity.

Source: Fannie Mae – Low Down Payment Options

When Is 20% Down a Good Idea?

If you’ve got the funds, putting 20% down can help you:

  • Avoid PMI altogether
  • Lower your monthly payment
  • Strengthen your offer in a competitive market

But for many buyers, especially here in Denver, Centennial, Parker, or Castle Rock, holding onto some cash for repairs or emergency savings is more valuable than hitting that 20% target.

So What’s Right for You?

That depends on your goals, budget, and financial comfort zone. Some people are better off putting 5% down and using the rest of their savings for renovations or reserves. Others want the peace of mind that comes with no PMI.

There’s no one-size-fits-all and that’s why having a personalized conversation matters.

Source: Consumer Financial Protection Bureau – Understanding PMI

The Bottom Line

No, you don’t need 20% down to get a conventional loan in Colorado. In fact, many of my clients qualify with 3% to 5% down and they’re thrilled they didn’t wait years to save up more.

If you’re ready to explore your options, I’d be happy to run the numbers and show you what’s possible.

Call me at 303-670-0137 or contact me here.
Let’s get you one step closer to home.

Posted in Blog, Home Purchase