Do you need 20% down to buy a home in Denver?
No. Many loans allow 3% to 5% down, FHA loans allow 3.5%, and CHFA and metroDPA offer down payment help to buyers who qualify. Putting less down means a higher monthly payment and, usually, mortgage insurance.
Where the 20% idea comes from
20% down is the point where most conventional loans stop charging mortgage insurance. That’s it. It was never a rule about who’s allowed to buy. It became folk wisdom because it’s the cleanest number, and because parents who bought in the 1990s remember it that way.
What 3%, 5%, 10%, and 20% down look like on one Denver home
The Denver metro median price in September 2026 was $575,000 for all homes and $635,000 for detached homes, according to DMAR. Call it $600,000 for the shape of the math.
| Down payment | Cash down | Loan amount | Principal and interest | Mortgage insurance |
|---|---|---|---|---|
| 3% | $18,000 | $582,000 | $4,030 | Yes |
| 5% | $30,000 | $570,000 | $3,947 | Yes |
| 10% | $60,000 | $540,000 | $3,739 | Yes, less |
| 20% | $120,000 | $480,000 | $3,323 | No |
The payments use a 30-year fixed rate of 7.40%, Freddie Mac’s average for the week of October 15, 2026.
The payment column is principal and interest only. Property taxes, homeowners insurance, and mortgage insurance are extra. On this house, principal and interest at 5% down runs about $620 a month more than at 20% down, before mortgage insurance. Whether that’s worth $90,000 of your savings depends on what else that money could do and how long you plan to stay.
Mortgage insurance, in plain terms
Mortgage insurance protects the lender if you stop paying. You pay for it. On a conventional loan it’s called PMI and runs roughly 0.46% to 1.50% of the loan amount per year (Urban Institute figures, as reported by Experian in May 2026), split into your monthly payment. On an FHA loan it’s a separate up-front fee plus a monthly amount.
On a conventional loan, you can ask to cancel PMI once you’ve paid the balance down to 80% of the home’s original value, and it ends on its own at 78%. Some lenders also drop it sooner if the home has gone up in value and a new appraisal shows it. On an FHA loan with less than 10% down, it stays until you refinance.
Down payment help in Colorado
CHFA pairs its loans with a grant of up to 3% of the loan or a second loan of up to 4%, both capped at $25,000. Denver’s metroDPA is a second loan with no interest and no payments, repaid when you sell or refinance. Both have income limits. The Colorado programs post covers who qualifies and the tradeoffs.
How to decide
A lower down payment means a higher monthly payment and mortgage insurance. A higher down payment means less cash left after closing. Brett runs both versions with buyers: the full monthly payment at each down payment level, how much stays in savings, and what the leftover cash could earn somewhere else. If the numbers say wait and save, he says so.
For a buyer looking at a bungalow in Sunnyside, the difference between 5% and 20% down is the difference between buying this year and buying in three. Most of Brett’s first-time buyers put down 3% to 10%.
This is general information, not financial advice. A lender confirms what you qualify for and what it costs.
Questions
Can I buy a home in Denver with 3% down?
Yes, on a conventional loan if you qualify. Fannie Mae and Freddie Mac both back 3% down loans for buyers who meet the income and credit rules. A participating lender confirms which you fit.
Is FHA's 3.5% down only for first-time buyers?
No. FHA loans are open to repeat buyers too. The 3.5% minimum applies with a credit score of 580 or higher.
When does mortgage insurance go away?
On a conventional loan, you can ask to cancel it once you've paid the balance down to 80% of the original value, and the lender must drop it at 78%. On an FHA loan with less than 10% down, the insurance stays for the life of the loan unless you refinance.
This article is general information. A lender, attorney, or tax professional can tell you what applies to your situation.
