What’s the Difference Between FHA, VA, and Conventional Loans in Colorado?
If you’re buying a home in Colorado, especially as a first-time buyer, you’ve probably come across the terms FHA, VA, and Conventional loans. These are the most common mortgage options, and understanding the differences can help you decide which one fits your situation best.
Here’s a simple breakdown of each loan type and when it might make sense to use them.
FHA Loans: Easier credit, low down payment
FHA loans are backed by the Federal Housing Administration and are designed to make homeownership more accessible, especially for first-time buyers or those with less-than-perfect credit.
Key benefits:
- As little as 3.5% down
- Credit scores as low as 580
- Flexible on income and past credit issues
FHA loans do require mortgage insurance, both upfront and monthly, which adds to the overall cost, but they’re a great option if you’re looking for a more forgiving approval process.
Learn more about FHA loans in Colorado
VA Loans: No down payment for military buyers
VA loans are backed by the U.S. Department of Veterans Affairs and available to eligible veterans, active-duty service members, and some surviving spouses.
What makes them stand out:
- 0% down payment required
- No mortgage insurance
- Competitive interest rates
- Lower closing costs in many cases
You’ll need a valid Certificate of Eligibility (COE), but VA loans are often one of the most affordable and powerful loan options available.
Check out VA loan options in Colorado
Department of Veterans Affairs – Eligibility
Conventional Loans: Strong buyers, flexible options
Conventional loans are not backed by the government. These loans are ideal for buyers with stronger credit, stable income, and the ability to make at least a small down payment.
Why choose conventional:
- Down payments as low as 3% for first-time buyers
- No mortgage insurance with 20% down
- Lower long-term costs for high-credit borrowers
- More options for removing mortgage insurance
You’ll typically need a credit score of 620 or higher to qualify, and private mortgage insurance (PMI) applies if you’re putting less than 20% down.
Explore conventional loan options
So which loan is right for you?
It depends on your financial profile and homeownership goals. Some buyers qualify for all three options, while others might find one a better fit based on credit, income, or eligibility.
If you’re in Centennial, Parker, Highlands Ranch, Castle Rock, or anywhere in the Denver metro area, I’d be happy to review your situation and help you compare loan types side by side.
You can call or text me at 303-670-0137, email rbaxter@choicemortgage.com, or connect with me here. I’ll help you find the most strategic and affordable way to buy a home in Colorado.
