Conventional Loans in Colorado: Fannie Mae Guidelines 2026

Conventional loans backed by Fannie Mae

This is the most common mortgage in the country. It is flexible for primary homes, second homes and rentals, and its mortgage insurance can be removed as you build equity.

Who it fits

Conventional is the default choice for buyers with solid credit, whether you are buying your first home, moving up, adding a cabin or buying a rental. It has no upfront mortgage insurance fee, and the monthly insurance goes away once you have enough equity.

In Southwest Colorado, acreage, wells, septic and outbuildings are common, and they work with conventional loans when the appraisal supports the home’s value. Second homes near Durango, Pagosa Springs and Telluride are a frequent fit.

What you can buy

Home	Minimum down
1-unit home you live in	3% with HomeReady, Home Possible or a first-time buyer; 5% otherwise
2–4 units you live in	5%
Second home	10%
1-unit rental	15%

Pricing depends on more than your rate

Your credit score, down payment and property type all shift the price of a conventional loan. Crossing a pricing threshold, such as a 680 score or 10% down, can lower your cost noticeably. We look for those thresholds and tell you when a small change is worth making. See How we choose your loan program.

Enter the price and down payment to see the month you can ask to remove mortgage insurance and the month it ends on its own.

When mortgage insurance comes off. Turn on JavaScript to change the numbers.

It ends on its own after11 years, 7 months

At 78% of the original value. You can ask to remove it after 10 years, 7 months, at 80%.

The balance over time

Time since closing5 years

Closing30 years

78%80%

Loan balance, as a share of the original value 89.2%

Charged now After 5 years, the balance is 89.2% of the original value. It reaches 80% after 10 years, 7 months.

With today's value

Enter today's value (estimated) to see whether a new appraisal could remove it sooner.

Rules for removal on today's value come from Fannie Mae and Freddie Mac and can vary by servicer; ask yours. You also need a good payment history and, in most cases, no second liens. FHA loans follow their own rules; VA loans have no monthly mortgage insurance.

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Calculators and guides

Common questions

Do I need 20% down for a conventional loan?

No. Putting 20% down avoids mortgage insurance. On a home you'll live in, conventional loans allow 3% down through HomeReady or Home Possible for incomes up to 80% of the area median, first-time buyer or not, or with at least one first-time buyer on the loan; 5% otherwise.

What is the conforming loan limit in La Plata County for 2026?

For a 1-unit home it is $832,750, the national baseline. Loans above the limit are jumbo loans with different rules.

How do I remove PMI?

Ask your servicer in writing once your balance reaches 80% of the original value, or it ends automatically at 78% if you are current. See the CFPB's explanation.

Fannie Mae or Freddie Mac?

You don’t need to pick. Their rules are similar, and as your Mortgage Broker we run your file under both when it helps, then choose the path and the lender that cost you less.