2026 FHA vs. Conforming Loan Limits in California

I’m Michael DiVita (DRE #01372066 | NMLS #241655), owner of DiVita Home Finance (DRE #01818285 | NMLS #323700) in Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. Call (800) 239-1103 and I’ll run FHA and conventional side by side on your actual numbers.

One of the most common questions I get from California buyers is whether to go FHA or conventional. The honest answer usually comes down to three things: your credit score, how much you’re putting down, and what county you’re buying in. For 2026, the FHA and conforming loan limits are identical in California’s highest-cost counties ($1,249,125 for a single-family home), but FHA runs well below the conforming limit in most inland counties — and that gap changes which loan is even available to you.

How the Two Limits Are Set

The two limits come from different agencies using related formulas:

• Conforming limits (Fannie Mae and Freddie Mac) are set each year by the Federal Housing Finance Agency. For 2026 the national baseline is $832,750 for a one-unit home. In high-cost areas the limit is 115% of the local median home value, capped at 150% of the baseline — $1,249,125. No county goes below the baseline.
• FHA limits are set by HUD. They use the same 115%-of-median calculation and the same $1,249,125 ceiling, but the FHA floor is only 65% of the conforming baseline — $541,287 for 2026.

The practical result: in expensive coastal counties, FHA and conforming limits match exactly. In counties where the median-based figure falls between $541,287 and $832,750, FHA tops out lower than conforming.

2026 FHA vs. Conforming Limits by California County (1-Unit)

Figures are 2026 one-unit limits published by HUD and FHFA. A handful of smaller counties (Mono, Alpine, Nevada, Mendocino) have their own FHA figures between the floor and the baseline. Always confirm the exact county with me or on HUD’s lookup tool before you write an offer.

2–4 Unit Limits in the $1,249,125 Counties

In floor counties, FHA’s 2–4 unit limits are $693,050, $837,700 and $1,041,125, versus conforming baseline limits of $1,066,250, $1,288,800 and $1,601,750.

What the Limit Means for Your Down Payment

Both limits apply to the loan amount, not the purchase price. So:

Purchase price − loan limit = the minimum down payment to stay inside that program.

Example in Marin: a $1,400,000 purchase with a $1,249,125 limit needs at least $150,875 down (about 10.8%) to stay FHA or conforming. Above that loan amount you’re in jumbo territory, which usually means more down, stronger credit and more reserves. For buyers in the $1.2M–$1.6M range I always model all three — FHA with a larger down payment, conforming with a larger down payment, and jumbo — because the cheapest option isn’t obvious until you run the numbers.

In Riverside County the math is different: a $750,000 home is above the $690,000 FHA limit but well inside the $832,750 conforming limit. A buyer there who wants 3.5% down has to either bring $60,000+ down to fit FHA or use a conventional program instead.

Key Differences: FHA vs. Conforming in 2026

When FHA Is the Better Choice

• Credit in the 580–660 range. FHA pricing is much less sensitive to credit score than conventional PMI. Below roughly 680, FHA is often cheaper month to month even with its lifetime MIP.
• Higher debt-to-income ratios. FHA’s automated underwriting tolerates more debt when the rest of the file is strong.
• Recent credit events. The shorter bankruptcy and foreclosure waiting periods can get you back into a home years sooner.
• Thin or non-traditional credit. FHA allows alternative credit such as rent and utility history in some cases.
• 2–4 unit purchases with 3.5% down. Live in one unit and projected rent from the others can help you qualify (3- and 4-unit properties must also pass FHA’s self-sufficiency test).

When Conforming Is the Better Choice

• Credit of 700+. PMI gets cheap at higher scores and it goes away. FHA MIP with 3.5% down never does.
• Inland counties where the price is above the FHA limit. In Sacramento, Riverside, San Bernardino, Solano, San Joaquin and the floor counties, conforming reaches $832,750 while FHA stops far lower.
• Homes that need work. Conventional appraisals are less strict than FHA’s minimum property standards on items like peeling paint, missing handrails or roof life.
• Condos not on the FHA approved list. Many California condo projects aren’t FHA-approved; conventional has more paths.

A Worked Example: $700,000 in Sacramento County

Sacramento’s 2026 FHA limit is $764,750, so a $700,000 purchase with 3.5% down ($675,500 base loan) fits FHA.

• FHA: the 1.75% upfront premium is about $11,821, usually financed into the loan. Annual MIP at 0.55% runs about $310 a month to start, and with less than 10% down it stays for the life of the loan unless you refinance.
• Conventional with 3–5% down: no upfront premium. Monthly PMI depends heavily on credit score. For a 740+ borrower it is often well below FHA’s MIP; for a borrower in the 600s it can be higher. Either way, it can be removed once you reach 20% equity.

That’s why I never give a blanket answer. I price both options on the same day with your actual credit report, then look at the total cost over the number of years you realistically expect to keep the loan.

Stacking Down Payment Assistance

CalHFA’s MyHome Assistance Program is a deferred-payment second loan of up to 3.5% of the price with a CalHFA FHA first mortgage, or up to 3% with a CalHFA conventional first. It requires first-time buyer status and income under CalHFA’s county limits. Other programs such as GSFA Platinum can also pair with FHA or conventional first loans. Many retail lenders don’t offer these programs; as a broker I can.

Frequently Asked Questions

Is the FHA loan limit the same as the conforming loan limit in California?

In the highest-cost counties, yes. For 2026, San Francisco, Marin, San Mateo, Santa Clara, Alameda, Contra Costa, Santa Cruz, San Benito, Los Angeles and Orange County all have a $1,249,125 limit for both FHA and conforming loans, and counties like San Diego, Ventura, Napa and Sonoma also match. In most inland counties FHA is lower. Sacramento is $764,750 FHA versus $832,750 conforming, and Fresno or Kern are at the $541,287 FHA floor.

What is the FHA loan limit in California for 2026?

It ranges from the national floor of $541,287 in lower-cost counties to the ceiling of $1,249,125 in high-cost counties for a single-family home. Two- to four-unit limits in ceiling counties are $1,599,375, $1,933,200 and $2,402,625.

Can I buy a home above the FHA limit with an FHA loan?

Yes, as long as the loan amount stays at or below your county’s limit. The purchase price minus the limit is the minimum down payment. On a $1,400,000 Marin home with a $1,249,125 limit, that’s $150,875. At that point I compare FHA against conventional and jumbo options, because a larger down payment often makes conventional cheaper.

Can I cancel FHA mortgage insurance?

If you put less than 10% down, FHA’s annual MIP lasts for the life of the loan. With 10% or more down, it ends after 11 years. The usual way out sooner is refinancing into a conventional loan once you have about 20% equity. Conventional PMI can be cancelled at your request when the balance reaches 80% of the original value and ends automatically at 78%.

What credit score do I need for a conforming loan?

Fannie Mae removed the hard 620 minimum from its Desktop Underwriter system in November 2025, but most lenders still apply a 620 floor, and manually underwritten loans still require 620. Pricing improves at each tier up to 780. If your score is under 620, FHA (580 for 3.5% down) is usually the more realistic path.