Buying your first home in California is a big step, but the rules — what you qualify for, what programs exist, what it actually costs — are not as opaque as they seem. This guide walks through the options that actually move the needle for first-time buyers in 2026.
Who counts as a "first-time buyer"?
Most programs define a first-time buyer as someone who hasn't owned a primary residence in the past three years. That means even if you owned a home in the past, you may still qualify today.
The four loan types most first-time buyers use
FHA loans
Backed by the Federal Housing Administration. As little as 3.5% down with a 580 FICO score. Lower credit-score thresholds and more flexibility on debt-to-income than conventional. The trade-off is monthly mortgage insurance that, on most 30-year FHA loans with under 10% down, sticks with you for the life of the loan.
Conventional 3%-down
For first-time buyers with a 620+ FICO, conventional loans can require just 3% down through programs like Fannie Mae HomeReady or Freddie Mac Home Possible. Monthly PMI is required until you reach 20% – 22% equity, but unlike FHA it eventually goes away.
VA loans
If you're a veteran, active-duty service member, National Guard or Reserve member, or a qualifying surviving spouse, the VA loan is almost always the right answer: zero down, no monthly mortgage insurance, and competitive rates.
USDA loans
For homes in eligible rural and suburban areas (many California outlying suburbs qualify), USDA offers 100% financing for buyers within the income limits.
Down-payment assistance: CalHFA
The California Housing Finance Agency runs several programs that can stack on top of an FHA or conventional first mortgage:
- MyHome Assistance Program — a deferred-payment second mortgage to help with down payment and/or closing costs.
- Forgivable Equity Builder — for very-low-income first-time buyers, a forgivable second mortgage of up to 10% of the purchase price.
- CalHFA Conventional / FHA — the underlying first mortgages CalHFA pairs with its assistance programs.
Each has income, education, and occupancy requirements. We'll walk you through whether the math works for your situation.
Realistic costs to plan for
- Down payment: 0% – 5% on most first-time programs.
- Closing costs: Roughly 2% – 5% of the loan amount. Sellers can often contribute toward these in California, especially in the current market.
- Earnest money deposit: Typically 1% – 3% of the purchase price, held in escrow.
- Inspection: $400 – $700 depending on the home.
- Reserves: Some programs require 1 – 2 months of housing payments in savings after close.
What to do first
- Pull your credit and review it. Errors are common. Disputes take 30 – 60 days to resolve, so start early.
- Get pre-approved before you tour homes. Without a pre-approval, most agents and sellers in California won't take an offer seriously.
- Know your true monthly comfort zone. A bank will qualify you for more than you'll actually want to pay each month. Decide what works for your budget.
- Pick a lender who answers the phone. Mortgage timelines are short and surprises are common. Working with someone who picks up matters more than you'd think.
Sources
- HUD — FHA loan limits and program details
- CalHFA — California Housing Finance Agency programs
- VA — VA home loan benefits
Have a question about your specific situation? Reach out or start a pre-approval and we'll get you a clear written quote.