How much cash do I need to buy a home in Colorado Springs?
Short answer: Plan for four amounts, not one: your down payment (anywhere from 0% with a VA loan to 3–3.5% with low-down-payment conventional or FHA loans, or more if you choose), your closing costs, money that leaves your account before closing (earnest money, inspections, and usually the appraisal), and money you keep after closing for moving in and maintenance. Your loan officer can put exact numbers on the first three. The fourth is the one buyers most often forget.
The four amounts to plan for
| What it covers | When it's due | Credited back? | |
|---|---|---|---|
| Down payment | Your share of the purchase price | At closing | No; it becomes your equity |
| Closing costs | Loan costs, prepaid insurance and taxes, title, HOA fees | At closing | Seller concessions can cover some of it |
| Money due before closing | Earnest money, inspections, the appraisal (often paid upfront to the lender) | Days to weeks after your offer is accepted | Earnest money is applied to your cash at closing; inspection and appraisal fees are not |
| Money after closing | Moving, furnishing and outfitting the home, a maintenance reserve | From the day you get the keys | No |
The first three decide whether you can close. The fourth decides how comfortable the first year feels.
Down payment: often less than people think
Twenty percent down isn't a requirement for most buyers. The minimums depend on the loan:
- VA: no down payment required for eligible service members and veterans.
- FHA: 3.5% with a credit score of 580 or higher, and 10% for scores of 500–579. HUD doesn't let money you put toward closing costs count toward that 3.5%.
- Conventional: as little as 3% through programs such as Fannie Mae HomeReady and Freddie Mac Home Possible, with private mortgage insurance until you reach 20% equity.
Each loan type trades off down payment, mortgage insurance, and fees differently. See how to compare FHA, conventional, and VA financing.
A $0 down payment doesn't mean $0 cash. Even with a VA loan, you'll still need earnest money, inspection costs, and any closing costs the seller doesn't cover.
Should you put down more or keep more cash?
That's a conversation between you and your loan officer, because the right answer depends on your rate, your loan type, and your goals.
Personally, I like to have more cash in the bank. When you have money, you have options; when it's tied up in the house, you have fewer. That's my own philosophy, though, and you have to do what's best for your situation. A larger down payment means a lower monthly payment, and the question is how much lower for the amount you'd give up.
What often surprises people is how little a meaningful down payment can move the monthly payment. Hypothetical example: at a 6.5% rate on a 30-year loan, putting an extra $10,000 down lowers principal and interest by about $63 a month. That $10,000 could instead cover a new water heater, a furnace repair, or several months of payments if your income changes.
Two things can tip the math toward a bigger down payment. With a conventional loan, reaching 20% down removes private mortgage insurance. And with a VA loan, putting 5% or 10% down lowers the funding fee. Ask your loan officer to show you the payment at two or three different down payments side by side.
Money that leaves your account before closing
Some of your cash is due long before closing day.
Earnest money. Under Colorado's standard residential contract, your earnest money is due with the contract unless you and the seller agree to a later deadline. It's held in a trust account, often by the title company, and applied toward your cash at closing. If you terminate under a right the contract gives you, such as the inspection or appraisal provisions, and you do it by the deadline, you're generally entitled to it back. Miss a deadline and it can be at risk.
Inspections and the appraisal. The general inspection, plus any add-ons such as a radon test or sewer scope, is typically paid when the work is done, and many lenders collect the appraisal fee upfront. You pay these even if you later walk away from the house.
Proof of funds. The same contract asks you to state whether you have the cash for closing immediately verifiable and available. Your lender will verify it too.
Good Funds at closing. Colorado requires the money you bring to closing to be in certified form, such as a wire or cashier's check. Always confirm wiring instructions by calling the title company at a number you've verified yourself. For the full list of closing costs, see typical buyer closing costs in Colorado Springs.
The money buyers forget: outfitting the home and maintenance
When I talk with buyers about cash, the two things they most often forget are what it costs to actually outfit the home and money set aside for maintenance when the home needs it.
Moving in is exciting, and people want to make the home theirs. That can mean towels, bath mats, curtains, and organization for closets and the garage. And a home is never perfect when you buy it, so there are usually things you'll want to give attention to early.
A maintenance reserve is separate from your emergency fund. It's the money for the repair you didn't see coming, so a furnace or water heater doesn't land on a credit card in your first year.
What's specific to Colorado Springs
Down payment assistance in El Paso County. El Paso County's Pikes Peak Down Payment Assistance program (PPDPA) offers qualified buyers up to 5% of the loan as a 0% soft second mortgage, forgiven at 30 years, for a home anywhere in the county, including the City of Colorado Springs. It has no first-time buyer requirement. Statewide, the Colorado Housing and Finance Authority (CHFA) offers a grant of up to the lesser of $25,000 or 3% of the first mortgage, or a deferred second mortgage of up to the lesser of $25,000 or 4%, through participating lenders, and CHFA notes that higher interest rates apply when you use its assistance. Income limits, homebuyer education, and other requirements apply, so confirm current terms with a participating lender. See down payment assistance programs for Colorado Springs buyers.
New construction and landscaping. Outfitting isn't limited to new construction, but with new construction, landscaping often isn't included, and it can be a significant additional cost. HOAs typically give you some time to get it installed, but it's a cost you need to plan on. Colorado law (SB23-178) requires HOAs to allow water-wise options and to offer at least three preapproved front-yard garden designs, so ask for those designs and the installation deadline before you close. A newer community may also have a metro district that affects your monthly cost; see what a metro district is.
Military buyers. VA loans are common in Colorado Springs, and $0 down can make buying possible sooner. Keeping more cash in reserve matters even more if orders could arrive early. If you might keep the home as a rental after a PCS, your risk changes, so plan a larger reserve before you buy; see whether to sell or rent your home when you PCS and how BAH affects what you can afford.
Before you move money around
Talk to your loan officer before you move money between accounts, cash out investments, or accept a gift. Lenders verify where your money came from. On conventional loans, Fannie Mae has lenders review any single deposit larger than 50% of your monthly qualifying income, so an unexplained transfer can mean extra paperwork late in the process. Most loan programs allow gifts from family, with a signed gift letter and documentation your lender will describe.
A simple way to estimate your number
- Get pre-approved. Ask your loan officer for a Loan Estimate at the price range you're considering, with two or three down payment options. See how mortgage pre-approval works.
- Add the money due before closing: earnest money, inspections, and the appraisal.
- Add moving and outfitting: movers or a truck, and the things that make the home livable for you.
- Set your reserve: an emergency fund plus a maintenance reserve you won't touch for furniture.
- Compare the total with your savings. If it doesn't fit, adjust the price range, the down payment, the loan type, or the timeline, or look at assistance programs and seller concessions.
For the full buying sequence, see the steps to buying your first home in Colorado Springs, and for the monthly side, how much house you can realistically afford.
What could change the answer
- Your loan type and credit. They set your minimum down payment, mortgage insurance, and fees.
- Seller concessions. A seller paying some of your closing costs lowers the cash you need, and how much sellers are willing to give changes with the market.
- The home itself. HOA transfer fees, a metro district, a well or septic inspection, or new-construction landscaping can add cash.
- Assistance programs. Funding, income limits, and terms change; confirm current availability before counting on them.
- Your plans. If you might rent the home out later, plan for a larger reserve.
When to talk with a professional
Your loan officer is the right person for exact down payment, closing cost, and cash-to-close figures; ask for a Loan Estimate and compare more than one lender. A CHFA participating lender can tell you whether you qualify for state or county assistance. For how a purchase fits your broader savings and goals, a financial planner can help. If you'd like help working out how much cash to set aside for the homes you're considering, let's look at your plan together.
About the author
Weldon Hobbs is a Colorado Springs REALTOR® and co-founder of Team Hobbs Realty. He is a member of The Platinum Group, REALTORS®, Colorado Springs' #1 independent brokerage, which pairs deep local expertise with premium marketing exposure. A U.S. Air Force Academy graduate and retired Air Force veteran, he and his family made more than 10 military moves. Since 2006, he and his wife, Kristen, have bought and sold their own homes, managed a portfolio of rental properties, and guided others through their own real estate decisions. He has also helped both family members and clients downsize, where the decisions are often complex and the process can feel overwhelming. Drawing on his background as a PMP® (Project Management Professional), he helps people break those decisions into clear, manageable steps.
Since beginning his real estate career, he has ranked in the top 7% by sales volume among the more than 4,000 members of the Pikes Peak Association of REALTORS®. He works with military families, seniors and downsizing clients, luxury and premium home sellers, and people relocating to Colorado Springs. He developed the Life → Wealth → Real Estate™ method, hosts the national YouTube channel Life & Real Estate Without Regret, and holds an MBA along with the SRES® (Seniors Real Estate Specialist®), MRP (Military Relocation Professional), and Certified Financial Coach credentials. More about Weldon
Sources
- HUD, What is the minimum down payment requirement for FHA?: https://answers.hud.gov/FHA/s/article/What-is-the-minimum-down-payment-requirement-for-FHA
- Congressional Research Service, FHA-Insured Home Loans: An Overview (credit score tiers; closing costs don't count toward the 3.5%): https://www.congress.gov/crs-product/RS20530
- U.S. Department of Veterans Affairs, VA funding fee and closing costs: https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
- Colorado Division of Real Estate, Contract to Buy and Sell Real Estate (Residential), educational copy (earnest money, available funds, Good Funds): https://dre.colorado.gov/sites/dre/files/documents/Contract%20to%20Buy%20and%20Sell%20Real%20Estate%20(Residential)%20Clean%20Educational.pdf
- Fannie Mae Selling Guide B3-4.2-02, Depository Accounts (large deposits): https://selling-guide.fanniemae.com/sel/b3-4.2-02/depository-accounts
- El Paso County, Pikes Peak Down Payment Assistance (PPDPA): https://admin.elpasoco.com/economic-development/housing-programs/ppdpa/
- Colorado Housing and Finance Authority, Down Payment Assistance: https://www.chfainfo.com/homeownership/down-payment-assistance
- Colorado General Assembly, SB23-178 Water-wise Landscaping in HOA Communities: https://leg.colorado.gov/bills/sb23-178