How should I compare FHA, conventional, and VA financing for a Colorado Springs home?

The four things to compare

A few details matter more than the table shows:

• The VA funding fee drops as your down payment rises. For a first-time VA purchase, it's 2.15% of the loan amount with less than 5% down, 1.5% with 5% or more, and 1.25% with 10% or more. After your first use, it's 3.3% with less than 5% down. Veterans who receive VA disability compensation are exempt.
• FHA mortgage insurance usually doesn't go away on its own. With less than 10% down, you pay it for the life of the loan. Many owners who want it gone later refinance into a conventional loan once they have enough equity, which is a new loan with its own costs.
• Conventional private mortgage insurance does go away. Federal law lets you request cancellation once your balance is scheduled to reach 80% of the home's original value, and requires it to end automatically at 78%, as long as you're current on your payments.

Why the down payment usually drives the decision

In my experience, the choice usually comes down to how much money you want to put down.

Here's why. With 20% down, a conventional loan carries no mortgage insurance at all, while a VA loan still charges a funding fee (1.25% at 10% or more down) unless you're exempt. With little or nothing down, VA avoids both a down payment and monthly mortgage insurance, which is why eligible buyers so often start there. FHA's lower minimum down payment can help a buyer who is still building savings or credit, but its mortgage insurance tends to stay with the loan.

I've seen VA-eligible buyers choose conventional. It depends on the individual: their finances and their goals. That's where I refer you to a loan officer, because the loan officer's job is to optimize your loan around your financial goals, what you can put down, and the payment you're comfortable with. If you're using VA, see how to choose a lender for a VA loan in Colorado Springs.

What's specific to Colorado Springs

El Paso County's loan limits. El Paso County is a standard-cost county, so its 2026 limits sit at or near the national baselines: $832,750 for a conventional conforming loan and $541,650 for an FHA loan on a single-family home. FHA's limit is the one that can bite here. Before you choose FHA, check whether the price of the home you want keeps the loan under that limit. If it doesn't, you'd need a larger down payment to stay under it, or a different loan type. For VA, see whether there's a VA loan limit in El Paso County.

VA loans are common here. Because Colorado Springs has such a large military community, VA loans are very common, and in my experience they're widely accepted. Each seller decides which offers to consider, but a seller who won't consider VA offers is shutting out a major part of the buyer pool.

Property requirements, on both sides of the sale. As a Military Relocation Professional, I know what to look for in a home to anticipate challenges with the VA appraisal and VA minimum property requirements, whether I'm representing the buyer or the seller. FHA has minimum property standards too, and I take the same approach. Catching a likely issue early, such as peeling paint, a missing handrail, or a roof near the end of its life, gives everyone time to plan instead of scrambling after the appraisal.

Condos and some townhomes. If you're buying a condo, FHA and VA each review the condominium project itself, not just your unit, and a townhome legally set up as a condominium can need the same review. Ask your lender to check the project early. See what to look for in HOA financials before buying a condo or townhome.

Military families. If you're VA-eligible, your BAH and your plans after your next PCS affect which loan makes sense. See how BAH affects what a military family can afford and keeping your home as a rental and using your VA benefit again.

A simple way to decide

• If you're VA-eligible and putting little or nothing down, start by pricing VA, then ask your loan officer to compare it with conventional at the down payment you're considering.
• If you can put 20% down, compare conventional (no mortgage insurance) against VA (funding fee unless exempt).
• If your savings or credit are still building, ask how FHA compares with low-down-payment conventional options, including how long the mortgage insurance would last on each.
• If the home is priced near or above $541,650, confirm whether FHA still works at your down payment before you make an offer.
• If you're buying a condo, confirm the project is eligible for your loan type before you fall in love with the unit.

To see how the loan type fits your whole budget, see how much house you can realistically afford in Colorado Springs and typical buyer closing costs in Colorado Springs.

What could change the answer

• Loan limits change every year. FHFA and HUD set new limits each year, usually announced in late November or December.
• Premiums and fees change. HUD sets FHA mortgage insurance premiums, and VA sets the funding fee.
• Your credit, income, and debts. They affect your interest rate, your mortgage insurance cost, and which loans you qualify for.
• Your plans. How long you expect to stay, and whether you might keep the home as a rental, can change which loan fits best.
• Lender requirements. Individual lenders can set standards stricter than the program minimums.

When to talk with a professional

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, FHA Single Family lender information (2026 FHA mortgage limit floor and ceiling): https://www.hud.gov/hud-partners/single-family-lender
• HUD Mortgagee Letter 2025-23, 2026 Nationwide Forward Mortgage Loan Limits: https://www.hud.gov/sites/dfiles/hudclips/documents/2025-23hsgml.pdf
• HUD Mortgagee Letter 2023-05, reduction in annual mortgage insurance premiums: https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf
• HUD Single Family Housing Policy Handbook 4000.1 (down payment, credit score, mortgage insurance, property standards, condominium approval): https://www.hud.gov/hud-partners/single-family-handbook-4000-1
• 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/
• U.S. Department of Veterans Affairs, VA Lender's Handbook (VA Pamphlet 26-7), including Chapter 16 on condominiums: https://www.benefits.va.gov/WARMS/pam26_7.asp
• Consumer Financial Protection Bureau, When can I remove private mortgage insurance (PMI) from my loan?: https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/