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A first-time buyer in Colorado gets a mortgage in 5 steps: fix the credit score, pick the loan type, get a written pre-approval, choose the down payment help, and close at a Colorado title company. A 620 credit score, 3% to 3.5% down, and 2 years of income history open the door in Denver, Aurora, Lakewood, Thornton and every Front Range city.
This guide answers the questions Colorado first-time buyers ask about mortgages, with 2026 loan limits, the CHFA and metroDPA down payment programs, and the real monthly cost of a $600,000 Denver-metro home. It pairs with the First-Time Home Buyer Guide for Colorado, which covers the search, the offer and the inspection.
How a mortgage works in Colorado
A mortgage is a loan secured by the home. In Colorado the security instrument is a deed of trust, recorded with the county clerk and recorder, with the county Public Trustee named as trustee. You pay principal and interest every month for 15 or 30 years; the lender holds the deed of trust until the loan is paid, and the Public Trustee releases it when you pay off or sell. If you stop paying, the Public Trustee runs the foreclosure sale, 110 to 125 days after the lender files a Notice of Election and Demand.
Your payment has 4 parts, and lenders call it PITI: principal, interest, property taxes and homeowners insurance. Add mortgage insurance when the down payment is under 20%, and HOA or metro district dues where they apply. Colorado's effective property tax rate is about 0.5% of value, among the lowest in the country; hail-driven homeowners insurance on the Front Range runs $2,500 to $4,500 a year and is the line that surprises buyers from other states.
What credit score does a Colorado mortgage take?
- 580 to 619: FHA only, with 10% down under 580 and 3.5% down at 580 or above. Few Front Range lenders write loans under 600.
- 620 to 679: FHA, VA, CHFA and conventional loans open up. Conventional mortgage insurance is expensive in this band; FHA is the cheaper payment for most buyers here.
- 680 to 739: Conventional loans with mortgage insurance priced fairly; every down payment program in Colorado is available.
- 740 and above: The best conventional pricing.
A score under 640 does not end the plan; it changes the order. The Kenna Credit Care mortgage readiness program maps the 3 to 6 months of steps that move a score from 600 to 660, and a lender pulls a fresh report when the number is there.
The loan types Colorado first-time buyers use
| Loan | Minimum down | Minimum score | Mortgage insurance | Best fit |
|---|---|---|---|---|
| Conventional (Fannie Mae or Freddie Mac) | 3% for first-time buyers | 620 | Private MI, drops off at 20% equity | Scores 680+, steady W-2 income |
| FHA | 3.5% | 580 | Upfront 1.75% plus monthly MI for the life of the loan under 10% down | Scores 580 to 679, higher debt ratios |
| VA | 0% | No federal minimum; lenders use 580 to 620 | None; one-time funding fee unless exempt | Veterans, active duty, eligible spouses |
| USDA | 0% | 640 for automated approval | 1% upfront, 0.35% annual | Rural Colorado: parts of Weld County, Elbert County, Bennett, Strasburg |
| CHFA (FirstStep, SmartStep, Preferred) | 3% to 3.5% with CHFA assistance covering it | 620 | Follows the underlying FHA or conventional loan | Buyers under CHFA income limits who take the homebuyer education class |
| Jumbo | 10% to 20% | 700 | None at 20% down | Loans above the conforming limit |
The FHA versus conventional comparison for Colorado buyers runs the numbers side by side at 3.5% and 5% down. Veterans and buyers with FHA questions get the full rules on the government-backed home buying guide.
The 2026 conforming loan limit in Colorado
The 2026 conforming loan limit for a one-unit home in Denver, Arapahoe, Jefferson, Adams, Douglas, Broomfield, El Paso, Larimer and Weld counties is $832,750. Boulder County carries a higher limit because of its prices. A loan above the county limit is a jumbo loan with its own down payment and credit rules. FHA limits sit below the conforming figure in most Colorado counties and reset every January; the lender quotes the current number for the county where the home sits.
CHFA down payment help
The Colorado Housing and Finance Authority (CHFA) is the state's housing finance agency, and it is the biggest source of down payment help in Colorado. Its two tools:
- The CHFA down payment grant: up to 3% of the first mortgage, never repaid.
- The CHFA second mortgage: up to 4% of the first mortgage at 0% interest, no monthly payment, repaid when you sell, refinance or pay off the first loan.
Requirements: a 620 score, income under the CHFA limit for the county (the limits change each year and differ between Denver, Boulder and rural counties), a CHFA-approved homebuyer education class before closing (free online or in person), and a $1,000 minimum contribution from the buyer. First-time status is not required for every CHFA program; the loans work for repeat buyers under the income limit too.
metroDPA down payment help in the Denver metro
metroDPA is the down payment program run by the City and County of Denver and adopted by most metro cities and counties, including Aurora, Lakewood, Arvada, Westminster, Thornton, Littleton, Englewood, Centennial, Jefferson County, Adams County and Arapahoe County. It lends up to 6% of the first mortgage at 0% interest as a second mortgage that is forgiven after 3 years of living in the home. A 640 score and income under the program limit are the tests. metroDPA works with FHA, VA and conventional first loans and stacks with a 2-1 buydown paid by the seller.
Every Denver-area program, with income limits and the cities that participate, is in the first-time homebuyer programs in Denver guide.
Can a Colorado first-time buyer put zero down?
Yes, three ways. A VA loan for veterans and active duty puts 0% down with no mortgage insurance. A USDA loan puts 0% down on homes in USDA-eligible areas, which in Colorado means towns like Elizabeth, Bennett, Berthoud, Wellington and rural Weld County, not Denver, Aurora or Lakewood. A conventional or FHA loan paired with CHFA or metroDPA assistance brings the cash to close down to the $1,000 buyer contribution plus prepaid taxes and insurance. The mortgage options for first-time homebuyers in Colorado post lists every zero-down path.
How to get pre-approved in Colorado
Colorado sellers do not read an offer without a pre-approval letter, and the Colorado contract carries Loan Availability and Appraisal deadlines that a lender has to hit. A pre-approval is an underwriter's review of your documents, not a 5-minute online pre-qualification. Bring:
- Income: 30 days of pay stubs, 2 years of W-2s, 2 years of federal tax returns if self-employed or commissioned.
- Assets: 2 months of bank and retirement statements showing the down payment and closing funds.
- Identity and residence: driver's license, 2 years of address history, landlord contact for rent verification.
- Debts: the lender pulls the credit report; student loans in deferment count at 0.5% to 1% of the balance per month depending on the loan type.
Pre-approval takes 1 to 3 business days and is good for 90 days. The Colorado mortgage pre-approval guide lists the questions to ask before you choose a lender.
How much house you can afford in Colorado
Lenders cap total monthly debt at 43% to 50% of gross income depending on the loan; a comfortable budget is 36%. At $100,000 of household income, 36% is $3,000 a month for PITI plus other debts, which buys a $400,000 to $450,000 home with 5% down at rates between 6% and 7%. At $150,000, the same math reaches $600,000 to $650,000. The income needed for a $400K mortgage in Colorado post shows the full calculation.
The monthly payment on a $600,000 Denver-metro home
| Line | 5% down, conventional | 3.5% down, FHA |
|---|---|---|
| Loan amount | $570,000 | $589,000 plus $10,300 upfront MI financed |
| Principal and interest at 6% to 7% | $3,400 to $3,800 | $3,600 to $4,000 |
| Property taxes (Denver metro) | $250 to $375 | $250 to $375 |
| Homeowners insurance | $200 to $375 | $200 to $375 |
| Mortgage insurance | $150 to $300 at a 720 score | $270 for the life of the loan |
| Total before HOA | $4,000 to $4,850 | $4,300 to $5,000 |
Metro district homes in Parker, Castle Rock, Erie, Commerce City and Brighton add $150 to $400 a month in district taxes on top of these lines. Check the mill levy on the county assessor's site before you write an offer.
What a Colorado buyer pays at closing
Buyer closing costs in Colorado run 2% to 3% of the price: $12,000 to $18,000 on a $600,000 home. The lines are lender origination and underwriting ($1,000 to $2,500), appraisal ($600 to $900 on the Front Range), the lender's title policy ($800 to $1,500), title closing fee ($250 to $450), recording, the state documentary fee of 1 cent per $100, and prepaid interest, taxes and insurance. Colorado has no state transfer tax. Sellers in the current Denver market pay 1% to 3% of these costs as a concession when asked in the offer. The closing costs guide for Colorado buyers breaks out every line.
Mortgage broker or direct lender?
A mortgage broker shops your file to 10 to 30 wholesale lenders and earns a fee from the lender you pick. A direct lender underwrites and funds in-house, which means one point of contact and control over the Colorado contract deadlines. Both are licensed the same way in Colorado: every mortgage loan originator holds a license from the Colorado Division of Real Estate and an NMLS number that you look up on NMLS Consumer Access. Ask for the NMLS number before you send a single document. Two warning signs end the conversation: a request for an upfront fee before the application, and a promise of approval before the credit pull.
The Kenna Real Estate Group works with Mike Oswald, VP of Mortgage Lending at Rate, NMLS 261003, Equal Housing Lender. You are free to use any lender. The Colorado home financing guide explains the programs he runs for our buyers.
Fixed rate, adjustable rate or a buydown?
- 30-year fixed: the payment never changes; 9 of 10 Colorado first-time buyers choose it.
- 15-year fixed: a rate 0.5% to 0.75% lower and a payment 40% higher; it fits buyers with room in the budget.
- 7/6 or 10/6 ARM: a fixed rate for 7 or 10 years, then adjustments every 6 months, capped. It fits a buyer who will sell or refinance inside the fixed window.
- 2-1 or 3-2-1 buydown: the seller or builder prepays interest so the rate is 2% or 3% lower in year 1, stepping up to the note rate. The 3-2-1 buydown program in Colorado shows the savings on a $600,000 home.
- Assuming a seller's loan: FHA and VA loans from 2020 and 2021 carry rates near 3%, and a buyer with enough cash for the equity gap takes them over. The Colorado assumable mortgage guide explains the process.
Where to go next
- The Colorado Home Buyer's Guide
- How the Kenna Real Estate Group helps Colorado buyers
- First-time home buyer programs in Colorado
- How expanded CHFA down payment assistance works
- Homes for sale in Aurora
- Meet the agents of the Kenna Real Estate Group
Talk to the Kenna Real Estate Group
The Kenna Real Estate Group, Keller Williams DTC, walks Colorado first-time buyers from the credit report to the closing table: a lender introduction, the CHFA or metroDPA application, a written pre-approval, and an offer that hits every Colorado contract deadline. Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree. Then search every home for sale in Colorado with your pre-approval number in hand.