First-Time Homebuyer Loans: What You Need to Know in Colorado
The First Step Is Always the Hardest—But You’re Not Alone
If you’re dreaming about your first home in Colorado, you’re in good company—and you’re also in the right place. Whether you’ve got your eye on a starter home in Pueblo, a fixer-upper in Canon City, or a modern build in Colorado Springs, one thing’s true across the board: buying your first home is equal parts exciting and overwhelming.
At The Mortgage Man, James Romero helps dozens of first-time buyers every year unlock the door to homeownership—many who never thought it was possible. This guide was written just for you: the hopeful first-timer who’s ready to learn, but not sure where to start.
Let’s walk through the most common—and most helpful—first-time homebuyer loans available in Colorado, what they mean, and how to use them.
What Is a First-Time Homebuyer Loan?
A first-time homebuyer loan is a type of mortgage designed specifically for people who have never owned a home—or haven’t owned one in the past three years. These loans often come with flexible requirements, lower down payments, and even financial assistance options.
There’s no one-size-fits-all, but there’s almost always a right fit.
1. FHA Loans – A Favorite for First-Time Buyers
What It Is:
The Federal Housing Administration (FHA) Loan is one of the most popular mortgage options for first-time homebuyers in Colorado. It allows lower credit scores (as low as 580) and requires just 3.5% down.
Why Pueblo Buyers Love It:
Many of James’ clients in Pueblo and surrounding areas have found success with FHA loans—even when they were worried about their credit. These loans offer a realistic path to ownership for working families.
Quick Facts:
Minimum credit score: 580
Down payment: 3.5%
Can include closing costs in the loan
Must be primary residence
🔗 Learn more about FHA loans at HUD.gov
2. VA Loans – A Powerful Option for Veterans and Military Families
What It Is:
If you’ve served in the military, a VA Loan is an unbeatable benefit. Backed by the U.S. Department of Veterans Affairs, VA loans allow zero down payment, no private mortgage insurance (PMI), and often come with lower interest rates.
Local Tip from James:
In Pueblo and Colorado Springs, where there’s a strong military presence, James has helped many vets use VA loans to get into homes with no money down—and save thousands in upfront costs.
Quick Facts:
No down payment
No PMI
Competitive rates
Must meet military service requirements
🔗 Check your VA eligibility here
3. USDA Loans – For Rural and Suburban Buyers
What It Is:
The USDA Rural Development Loan is perfect for those buying in eligible rural areas of Colorado—including parts of Fremont County and eastern Pueblo County. It offers 100% financing, meaning no down payment, and is aimed at moderate- to low-income families.
Who It’s For:
If you’re looking outside the city (like in Florence, Avondale, or Penrose), this might be your best route. James often helps clients qualify even if they assume their income or location won’t fit—don’t rule it out without checking.
Quick Facts:
No down payment
Must buy in an eligible area
Income limits apply
Great for rural Colorado buyers
4. Conventional 97 – Small Down, Big Opportunity
What It Is:
This loan allows you to put down just 3% and still get a conventional mortgage (not backed by a government agency). It’s ideal for buyers with slightly stronger credit and stable income.
Why It’s a Great Fit in Colorado:
For young professionals in Colorado Springs or dual-income families in Pueblo West, this option helps minimize upfront costs while building equity fast.
Quick Facts:
Minimum credit score: 620
Down payment: 3%
Must be a first-time buyer
Ideal for stable income households
5. Colorado Housing Assistance Programs
In addition to federal loans, Colorado offers state-backed support to help first-time homebuyers. One standout is the CHFA (Colorado Housing and Finance Authority).
CHFA Highlights:
Down payment assistance up to 4%
Can be used with FHA, VA, USDA, or conventional loans
Education courses available (often required)
Great option for Pueblo buyers needing help with closing costs
James’ Tip:
Many buyers don’t realize this money is available—or think they won’t qualify. “We’ve helped people with $2,000 in savings close on a home thanks to these programs,” James says.
What Loan Is Right for You?
That depends. Here’s a simplified way to look at it:
Don’t worry—James will walk you through every option in your first meeting. It’s not about pushing you into a loan. It’s about finding the one that fits your life.
Common Myths First-Time Buyers Believe
“I need 20% down.”
Not always true. Most first-time buyers put down 3–5%. Some put down nothing at all with a VA or USDA loan.
“My credit isn’t good enough.”
Maybe, but probably not. James helps buyers with scores in the 600s—sometimes lower. The key is getting pre-qualified and seeing what’s possible.
“I can’t afford closing costs.”
Between lender credits, seller concessions, and programs like CHFA, you might not need to pay much out of pocket.
Pueblo Homebuyer Snapshot
Median home price (2025):$265,000
Typical first-time buyer age:32
Top loan type:FHA
Fastest-growing area:Pueblo West
Biggest regret? Not getting pre-approved sooner
James knows this market like the back of his hand. When you talk to him, it’s like talking to a friend who’s already walked this road and knows the shortcuts.
Final Thoughts: You’re Closer Than You Think
Buying your first home isn’t about perfection—it’s about progress. Whether you’ve got a down payment saved or are just starting to build credit, there’s a path forward.
You don’t need to figure everything out on your own. That’s what The Mortgage Man is here for.
Take the First Step Today
Ready to see what’s possible?
James Romero is just one call away. Let’s talk about your first home loan options—no pressure, just real answers.
