I’m Ben Yost, a Colorado mortgage broker with 25+ years of experience, and this is the #1 question I get — it’s also the #1 thing people are typing into Google and ChatGPT at 11pm when they can’t sleep. So let me give you the real answer.
The short answer
You do not need 20% down to buy a home in Colorado. Most first-time buyers here get in with somewhere between 0% and 3.5% down, plus a couple thousand for closing costs — and a big chunk of that can be covered by down payment assistance. The “you need 20%” thing is the single most expensive myth in home buying.
The buckets of cash (this is all there is)
There are really only a handful of things your money goes toward. Here’s the honest breakdown.
1. Down payment. This is the only number most people know about — and it’s the one that’s way smaller than you think.
- VA loan (veteran/active military): 0% down
- USDA (rural-ish areas — and more of Colorado qualifies than you’d guess): 0% down
- Conventional: as low as 3% down for first-time buyers
- FHA: 3.5% down
On a $450,000 home, the FHA down payment is about $15,750 — not the $90,000 the 20% myth would have you believe.
2. Down payment assistance. This is the game-changer. Colorado has DPA programs — grants and second mortgages — that can put up to $25,000 toward your down payment and closing costs. For a lot of first-time buyers, that’s the difference between “someday” and “this year.” I work with 30+ of these programs. Most lenders barely touch 2 or 3.
3. Closing costs. Lender fees, title, appraisal, taxes, recording — the stuff it takes to actually close the loan. On a home around $450K, figure roughly $4,500.
4. Escrows (prepaids). Your homeowners insurance and property taxes, set up ahead of time into an escrow account. On that same home, plan on about $3,500–$4,500.
5. A little reserve. Lenders like to see you’ve got a small cushion left after closing. Not a fortune — just proof you’re not scraping the very bottom of the account on day one.
Here’s what most people don’t know: the seller can pay a big part of all this for you. It’s called seller concessions, and in a lot of deals we structure it so the seller covers most or all of your closing costs. That’s not a loophole — it’s just knowing how to ask. Stack that with DPA and your actual out-of-pocket can get really small.
The part most lenders won’t tell you: down payment assistance
Colorado has some of the best down payment assistance programs in the country — CHFA, metro-area programs, and a stack of others. I work with 30+ of them.
In plain English: a program can cover your down payment, and sometimes your closing costs too. I’ve put buyers into homes for almost nothing out of pocket. Most lenders carry 2 or 3 DPA programs and barely mention them, because they’re a little more work. That’s exactly why so many buyers think they need way more cash than they actually do.
A real example from a Colorado client
A couple reached out — just had their first kid, figured they were two years away because they “only” had about $10K saved. They’d been quoted scary numbers somewhere else and almost gave up.
We ran it: FHA plus a DPA program covered the down payment, and the seller covered most of the closing costs. They were in a house in under 60 days — and kept most of their savings as a cushion. That $10K they thought was nowhere near enough? It was plenty.
Common mistakes to avoid
- Assuming you need 20% down and never even starting the conversation.
- Not asking about down payment assistance — most buyers don’t know it exists.
- Forgetting the seller can cover a big chunk of your closing costs.
- Letting one “no” from a lender convince you it can’t happen. Sometimes it’s a structure or program issue, not a you issue.
- Draining every dollar into the purchase and leaving no cushion.
So what do you actually need?
Honestly — a lot less than the internet is telling you. The real answer depends on the price range, the loan, and which assistance programs you qualify for. But “I don’t have 20% down” is almost never the thing that stops someone. Not knowing the options is.
If you’re 6–12 months out, that’s not a problem — that’s the best time to start. We can map out exactly what you’d need and which programs fit, with zero pressure. If you’re ready now, even better.
What to do next
Want to see what this looks like for your situation? No pressure, no sales pitch — just straight answers so you know your next move. Call or text 303-587-4297, or fill out the contact form and tell me where you’re at.
Ben Yost — Colorado mortgage broker, 25+ years. I help first-time buyers figure this stuff out in plain English. Equal Housing Lender. This is general information, not a commitment to lend; terms depend on your individual situation.
Related reading: Colorado down payment assistance programs: the plain-English guide · FHA vs. conventional loans in Colorado · What credit score do you need to buy a home in Colorado? · See all loan programs and services.
