Are you considering applying for a conventional home loan in Denver?
Conventional loans are a common option for Denver buyers who have stronger credit profiles or who want flexible down payment and PMI options. They can work well for borrowers who want to compare costs against FHA, and they are especially important to understand in a market where purchase price can determine whether a loan stays conforming or moves into jumbo territory.
This guide explains how conventional home loans in Denver work, including qualification basics, the difference between conforming and non-conforming loan limits, and when a conventional mortgage may be a better fit than FHA.
Here are some things you should know about conventional home loans in Denver before applying.
Unlike government-backed home loans — like FHA and VA loans — conventional mortgages are not guaranteed or insured by the government. If they do need to be insured (based on the down payment amount), private insurance companies would insure them.
Conventional home loans are considered somewhat riskier for lenders because they are not backed by government entities. That’s why the lending criteria for conventional mortgages are a bit more stringent compared to requirements needed to get approved for a government-sponsored loan, like an FHA loan.
The credit score requirements tend to be stricter, for instance, so you’d need a higher credit score to secure a conventional mortgage than you would for an FHA loan.
That said, conventional loans can also be more flexible than government-backed loans, which is why many qualified home buyers choose these types of loans.
What’s the difference between conforming and non-conforming conventional mortgages?
“Conforming” conventional loans are those that do not exceed the loan limits as set by the Federal Housing Finance Agency (FHFA). Each year, the FHFA assesses the current loan limits relative to housing prices and typically increases them every year, as housing prices typically go up every year.
Conforming loan limits take effect on January 1st of each year and are set based on a county-by-county basis. So, each county in the state of Colorado, for instance, could have its own unique loan limit.
For 2026, the loan limit for most counties in Colorado is $832,750, which is higher than last year’s loan limit. Denver’s conforming loan limit for 2026 is $862,500, which is above what most other counties in Colorado are at. The same is true for other high-cost areas in the state.
That means that you would have to buy a home that is under $862,500 in Denver in order to stay within the conforming loan limit and have your mortgage be considered a conforming loan.
“Non-conforming” conventional loans are those that exceed the conforming loan limits established by the FHFA for that calendar year. So, if you buy a home in Denver for $900,000 in 2026, for instance, that would exceed the conforming loan limit for that county. In this case, you would be taking out a “non-conforming” loan — or “jumbo loan.”
Non-conforming conventional loans are not purchased by Freddie Mac or Fannie Mae because they do not meet the loan amount requirements.
Check out our mortgage loan limit tool for conventional, FHA, and VA loans.
Many homebuyers choose to take out a conventional home loan in Denver for a few reasons:
Low down payment options. If you have a solid credit score and a low debt-to-income (DTI) ratio, you may qualify for a down payment as low as 3% of the purchase price of the home. This can be very attractive to many homebuyers, as coming up with a few thousand dollars for a down payment can be a deterrent to buying a home.
Option to avoid mortgage insurance. All government-backed FHA loans require mortgage insurance, no matter what your down payment amount is. That means you’ll be stuck having to pay mortgage insurance throughout the term of your mortgage in most cases, depending on your original down payment amount.
But with conventional loans, you have the ability to either get rid of mortgage insurance at some point or avoid it altogether. If you can gather up at least 20% of the purchase price of the home in the form of a down payment towards a conventional mortgage, you can avoid having to pay Private Mortgage Insurance (PMI), which is required with down payments less than 20%.
And even if you start off paying PMI, you can eliminate it after you’ve paid your mortgage down and have gained at least 20% equity in your home. Once your mortgage balance has been paid down to 80% of the property’s original appraised value, you can request to have your lender cancel the PMI. Otherwise, PMI will be automatically canceled after your equity reaches at least 78% of the purchase price of the home.
A conventional loan is often a stronger fit when you have stronger credit, stable income, and enough savings to choose between a low down payment and a larger one to reduce or avoid PMI. If you are comparing conventional versus FHA, conventional may be more appealing when you want more flexibility around mortgage insurance and may be able to improve pricing with a stronger borrower profile.
FHA may still be worth a closer look if your credit profile is thinner or if conventional pricing and PMI are less favorable for your situation. The key is that the same baseline down payment or credit benchmark does not always produce the same total monthly cost across programs.
For Denver buyers, loan size is another major decision point. If the home price keeps your loan amount within the applicable county conforming limit, a conforming conventional loan may be the simpler path. If your financing needs go above that county limit, you may be looking at a jumbo loan instead. Because limits are county-based, verify the property’s county as you shop across the Denver metro area.
To be eligible for a conventional loan, you will generally need the following baseline qualifications:
These figures are best viewed as guideposts, not guarantees. A borrower with stronger credit, a larger down payment, lower DTI, or more reserves may have access to better pricing or more flexible options. On the other hand, if one part of your file is weaker, that does not automatically mean a conventional loan is off the table, but it may affect your interest rate, PMI costs, or whether another loan program is a better fit.
That’s why it helps to look at the full picture instead of focusing on just one number. Income stability, debt levels, cash available for closing, and the size of the loan relative to Denver-area county limits can all influence which conventional option makes the most sense.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
A conventional loan generally requires a credit score of at least 620. A higher score may improve your interest rate and may also help with overall loan pricing.
Some conventional loans allow a down payment as low as 3% for qualified borrowers. If you put down 20% or more, you can typically avoid private mortgage insurance, or PMI.
No. Qualified borrowers may be able to put down as little as 3% on a conventional loan. A 20% down payment is mainly important if you want to avoid PMI from the start.
Conventional loans usually have stricter qualification standards than government-backed loans such as FHA. Borrowers often need stronger credit, stable income, and an acceptable debt-to-income ratio, but qualification depends on the full file rather than a single number.
Typical baseline requirements include a credit score of at least 620, a down payment of at least 3%, solid income, and a debt-to-income ratio of no more than 50%, with 43% or lower often preferred. These are general guideposts, and stronger overall finances may improve your options.
A conforming conventional loan stays within the Federal Housing Finance Agency loan limit for the county. A jumbo loan, also called a non-conforming conventional loan, exceeds that limit and is not purchased by Fannie Mae or Freddie Mac.
The conforming loan limit in Denver for 2026 depends on the official county limit published for that year. Because conforming limits are county-based and can change annually, the correct limit should be verified for Denver County before you buy or refinance.
Colorado conventional loan limits vary by county, and higher-cost counties can have higher conforming limits than others. For 2026, the applicable limit should be confirmed based on the specific county where the property is located.
Yes. If you start with PMI on a conventional loan, you may request cancellation once your mortgage balance reaches 80% of the home’s original appraised value. If it is not removed earlier, PMI is typically canceled automatically when your equity reaches 22%, meaning the loan balance is 78% of the original purchase price.
A conventional loan can be a better fit if you have stronger credit, stable income, and enough savings to choose between a low down payment and a larger one to reduce or avoid PMI. FHA may still be worth considering if your credit profile is thinner or if FHA pricing works better for your situation.
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