Yes, you can buy a home in California with just 3% down using a 2026 conforming loan — even at loan amounts up to $1,249,125 in high-cost counties. I help buyers across California structure these loans every week, from first-time buyers in Sacramento to move-up buyers in Orange County. I’m Michael DiVita — DRE #01818285 | NMLS #323700, DiVita Home Finance, Tiburon, CA. Call (800) 239-1103 and I’ll tell you exactly which program fits your situation.
Which Conforming Loan Programs Allow 3% Down in 2026?
Fannie Mae HomeReady
- Down payment: 3% minimum
- Loan limit: Up to county conforming limit (up to $1,249,125 in CA high-cost counties)
- Income limit: ≤80% of Area Median Income (AMI) — required
- Credit score: 620 minimum
- PMI: Reduced PMI rates vs. standard; cancels at 20% equity
- Key benefit: Rental income from ADU can count toward qualifying income
Freddie Mac Home Possible
- Down payment: 3% minimum
- Loan limit: Up to county conforming limit
- Income limit: ≤80% AMI
- Credit score: 660 minimum (more restrictive than HomeReady)
- PMI: Reduced rates; cancels at 20% equity
- Key benefit: Flexible sources for down payment (gifts, grants, secondary financing)
Fannie Mae Standard 97
- Down payment: 3% minimum
- Loan limit: Up to county conforming limit
- Income limit: None — no income cap
- Credit score: 620 minimum
- Requirement: At least one borrower must be a first-time homebuyer
- PMI: Standard PMI; cancels at 20% equity
2026 California 3% Down Examples by Region
| County | Purchase Price | 3% Down | Loan Amount | Within Limit? |
|---|---|---|---|---|
| Sacramento (baseline) | $858,000 | $25,740 | $832,260 | ✓ $832,750 |
| Riverside (baseline) | $858,000 | $25,740 | $832,260 | ✓ $832,750 |
| San Diego (high-cost) | $1,000,000 | $30,000 | $970,000 | ✓ $1,249,125 |
| Orange County (high-cost) | $1,200,000 | $36,000 | $1,164,000 | ✓ $1,249,125 |
| Santa Clara (high-cost) | $1,287,760 | $38,633 | $1,249,127 | ✗ Jumbo by $2 |
Maximum 3%-down purchase in high-cost counties: $1,287,757 (loan = $1,249,125 at 3% down)
What Are the Costs of 3% Down in 2026?
Lower down payment means PMI (private mortgage insurance) until you reach 20% equity. On a $970,000 loan:
- PMI rate: Approximately 0.4%–0.8% annually with HomeReady/Home Possible reduced rates
- Monthly PMI: Roughly $323–$647/month
- PMI removal: At 80% LTV (either through paydown or appreciation + new appraisal)
In many California markets where home values appreciate, PMI cancels faster than buyers expect.
Down Payment Assistance for 2026 Conforming Loans
California buyers using conforming loans can layer on down payment assistance programs:
- CalHFA MyHome: Deferred-payment loan up to 3.5% for down payment and closing costs
- CalHFA Dream For All: Shared appreciation loan covering up to 20% down (check current availability)
- Local county and city programs: Many CA cities offer additional DPA
HomeReady vs. Home Possible vs. Standard 97: Side-by-Side
| Feature | HomeReady | Home Possible | Standard 97 |
|---|---|---|---|
| Investor | Fannie Mae | Freddie Mac | Fannie Mae |
| Min. down payment | 3% | 3% | 3% |
| Min. credit score | 620 | 660 | 620 |
| Income limit | 80% AMI | 80% AMI | None |
| First-time buyer req. | No | No | At least 1 borrower |
| ADU income allowed | Yes | Yes | No |
| Gift funds allowed | Yes (100%) | Yes (100%) | Yes (100%) |
| Reduced PMI | Yes | Yes | No |
Frequently Asked Questions: 3% Down Loans in California
Can I use a 3% down loan to buy in a high-cost California county like Marin, San Francisco, or LA?
Yes. High-cost California counties like Marin, San Francisco, Santa Clara, Los Angeles, and San Diego all have conforming loan limits of $1,249,125 — the federal ceiling. You can purchase a home with 3% down as long as the loan amount stays at or below this limit. The maximum purchase price with 3% down in a high-cost county is $1,287,757.
What credit score do I need for a 3% down conventional loan?
The minimum credit score is 620 for HomeReady (Fannie Mae) and Standard 97 programs. Freddie Mac’s Home Possible requires a 660 minimum. Higher scores (720+) qualify for better PMI rates and lower overall costs. Borrowers with scores below 680 should also compare FHA (3.5% down), which may have more competitive total costs at lower credit tiers.
Is there an income limit for 3% down conventional loans?
HomeReady and Home Possible both cap income at 80% of Area Median Income (AMI) for the property’s location. In high-cost California markets, 80% AMI can be higher than you’d expect — in San Francisco, for example, 80% AMI for a family of 4 can exceed $130,000. Fannie Mae’s Standard 97 has no income limit but requires at least one first-time homebuyer. DiVita Home Finance will check AMI limits for your specific county and situation.
Can I combine a 3% down loan with CalHFA down payment assistance?
Yes. CalHFA’s MyHome Assistance Program provides a deferred junior loan (no payment until you sell/refinance) for up to 3% of the purchase price toward closing costs on a conventional HomeReady loan. Combined with the 3% conforming down payment, CalHFA assistance can significantly reduce cash needed to close. Income and purchase price limits apply — contact DiVita Home Finance to check current CalHFA availability.
Related Reading
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | Licensed since 2007. DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
