First-Time Home Buyer Guide for 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. Helping first-time buyers get from “can we even do this?” to the keys is some of the most rewarding work I do. Call (800) 239-1103.

First-time buyers in California can buy with 3.5% down on an FHA loan, 3% down on a conventional loan up to $832,750 (5% on larger high-balance loans), or 0% down with VA or USDA. CalHFA MyHome, Dream For All, GSFA Platinum and local programs can help cover the down payment and closing costs. The keys are a real pre-approval, a realistic budget that includes taxes and insurance, and knowing your county’s loan limits.

Who Counts as a First-Time Buyer?

For CalHFA and most assistance programs, you’re a first-time buyer if you haven’t had an ownership interest in a principal residence in the past three years. So someone who sold a home four years ago can qualify again. Fannie Mae and Freddie Mac use the same three-year test for their first-time-buyer programs.

Credit Score: What Opens Which Doors

Score	What’s typically available
780+	Best conventional pricing tier
680–779	Conventional, FHA, VA, USDA; pricing improves every 20 points
640–679	FHA, VA, USDA, CalHFA programs (640 minimum on CalHFA’s FHA, VA and USDA loans); conventional at higher cost
580–639	FHA with 3.5% down and VA through lenders that go that low
500–579	FHA with 10% down (limited lenders), or non-QM

Details in my credit score guide.

How Much Down Payment You Really Need

• FHA — 3.5% down with a 580+ score, up to your county’s FHA limit ($541,287 to $1,249,125 in 2026).
• Conventional — 3% down through HomeReady, Home Possible, Fannie Mae’s Standard 97 or Freddie Mac’s HomeOne, but only when the loan is $832,750 or less. On high-balance loans up to your county limit, the minimum is 5%.
• VA — 0% down for eligible veterans, service members and certain surviving spouses. See VA loans.
• USDA — 0% down in eligible rural and some suburban areas, with household income up to 115% of area median. See USDA loans.

Full breakdown with real-dollar examples: how much down payment you need.

Down Payment Assistance for First-Time Buyers

• CalHFA MyHome: deferred junior loan up to 3.5% of the price with CalHFA FHA (3% with CalHFA conventional). CalHFA income limits effective June 30, 2026 run about $192,000–$325,000 by county, and CalHFA has no purchase price limit.
• CalPLUS with ZIP: a slightly higher first-mortgage rate plus a zero-interest deferred loan of 2% or 3% for closing costs.
• Dream For All: up to 20% (max $150,000) for first-generation buyers when funded; repaid with a share of appreciation. See Dream For All.
• GSFA Platinum: up to 5.5% of the loan, statewide, open to repeat buyers too.
• City programs: for example, Los Angeles LIPA (up to $161,000) and San Francisco DALP.

Everything in one place: California down payment assistance. Teachers and first responders should also see teacher home loans and first responder home loans.

Know Your County’s Loan Limits

County	2026 conforming limit (1 unit)
Marin, San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa, Los Angeles, Orange, Santa Cruz, San Benito	$1,249,125
San Diego	$1,104,000
Ventura	$1,035,000
Napa	$1,017,750
Sonoma	$897,000
Sacramento, Riverside, San Bernardino, Fresno and other baseline counties	$832,750

Above your county’s limit you’re in jumbo territory, which usually means 10%–20% down. See 2026 conforming loan limits.

Prefer to watch? Here’s my first-time buyer checklist on video: what to have ready before you apply.

The Home Buying Process, Step by Step

1. Check credit and savings. Pull your reports at AnnualCreditReport.com, fix errors, and total what you have for down payment, closing costs and a reserve cushion.
2. Get pre-approved — not just pre-qualified. A pre-qualification is an estimate based on what you tell a lender. A pre-approval means your income, assets and credit have been reviewed and run through automated underwriting. In competitive California markets, that’s what listing agents expect.
3. Pick an agent who knows your target neighborhoods and how offers are being won there. Since the 2024 NAR settlement, you’ll sign a written buyer agreement and buyer-agent compensation is negotiated up front, so budget for it or ask for it in your offer.
4. Shop within a full-payment budget — principal, interest, property taxes, insurance, HOA dues and any mortgage insurance.
5. Write the offer. Price is one lever; others are the close date, contingency periods, appraisal-gap coverage (agreeing to cover a shortfall up to a cap) and a strong lender letter. I’ll make sure the financing terms match what your loan can actually do, and I’m happy to talk to the listing agent.
6. Open escrow and lock your rate. California escrows commonly run about 21–45 days.
7. Inspection and appraisal. If the appraisal comes in low, you have options — see what happens when an appraisal comes in low.
8. Final approval and Closing Disclosure. Federal rules require you to receive the Closing Disclosure at least three business days before you close.
9. Sign, fund, record — and get your keys.

A full document list is on my pre-approval checklist, and typical timing is on the approval timeline page.

Budget for the Full Monthly Payment

• Property taxes: Proposition 13 sets the base rate at 1% of your purchase price, plus local voter-approved taxes and assessments (and Mello-Roos in some newer communities). Ask for the property’s actual tax rate before you write an offer. See Prop 13 for home buyers and Mello-Roos.
• Homeowners insurance: in wildfire areas, get a quote early. Some buyers end up with the California FAIR Plan plus a wrap-around policy. See FAIR Plan and wrap policies.
• Mortgage insurance: conventional PMI with less than 20% down can be cancelled when your balance reaches 80% of the original value and ends automatically at 78%. FHA’s annual premium (0.55% on most 3.5%-down loans up to $726,200 and 0.75% above that) usually lasts for the life of the loan unless you put 10% or more down.
• HOA dues for condos and many townhomes.

Closing Costs

Expect closing costs of roughly 2%–3% of the price plus prepaid items: lender and appraisal fees, title insurance, escrow, recording, prepaid interest, the first year of insurance and property tax impounds. Seller credits, lender credits and assistance programs can cover much of this. See closing costs in California.

Six Mistakes First-Time Buyers Make

1. Relying on a pre-qualification. Get a real pre-approval before you shop.
2. Changing the file before closing. Lenders re-verify employment and often re-check credit just before funding. Don’t finance a car, open cards, change jobs or move large sums without talking to me first. See changing jobs during the mortgage process.
3. Not comparing lenders. The older FICO models used for mortgages count mortgage inquiries within 14 days as one. On a $900,000 loan, a 0.25% lower rate saves about $150 a month.
4. Budgeting on principal and interest only. Taxes, insurance, HOA and mortgage insurance can add a lot to the payment.
5. Assuming 20% down is required — or that assistance is only for low incomes. CalHFA’s limits reach into the $300,000s in some counties.
6. Undocumented deposits. Large cash deposits or unexplained transfers slow approvals. See large deposits flagged by lenders.

First-Time Buyers in Marin County

Marin is one of the hardest first-home markets in the state. Recent MLS-based reports put spring 2026 single-family medians at roughly $1.37 million in Novato and about $1.5 million in San Rafael, with Mill Valley, Tiburon and Kentfield far higher. What works for first-time buyers here: condos and townhomes in San Rafael (including Terra Linda) and Novato, FHA or high-balance conventional loans up to Marin’s $1,249,125 limit, family gifts, and 80-10-10 piggyback structures that keep the first mortgage under the conforming limit. Buyers in Larkspur, San Anselmo and Fairfax often end up in jumbo territory — see Marin jumbo loans — and Marin County and several cities also run below-market-rate homeownership programs with their own waitlists. My Marin mortgage page has more.

When the Bank Says No

A first decline often comes down to one lender’s overlays. Self-employed income, a thin credit file, a recent job change, gift funds or an ADU can all be handled with the right program. If you’ve been turned down, read what to do after a denial and call me — that’s the kind of file I like.

Frequently Asked Questions

What is a first-time homebuyer in California?

For CalHFA and most programs, anyone who hasn’t owned a principal residence in the past three years. Prior owners can qualify again after that period.

How much do I need for a down payment as a first-time buyer?

3.5% with FHA, 3% with conventional when the loan is $832,750 or less (5% on high-balance loans), and 0% with VA or USDA. Assistance programs and family gifts can cover part or all of it.

Can I use gift funds for my down payment?

Yes. On a one-unit primary home, both FHA and Fannie Mae allow the entire down payment to come from an acceptable donor, with a signed gift letter and documentation of the transfer. There’s no minimum contribution from your own funds.

What debt-to-income ratio do I need?

Fannie Mae’s automated underwriting can approve up to 50% total debt-to-income, and FHA’s automated system sometimes approves higher with strong compensating factors. CalHFA’s government loans cap at 45%. Many jumbo lenders stay around 43%.

How long does it take to buy a home in California?

Pre-approval can take a few days once documents are in. After your offer is accepted, escrow commonly runs about 21–45 days depending on the loan and any assistance programs.

Is it better to rent or buy in California in 2026?

It depends on how long you’ll stay, your rent, and the full cost of owning. Buying builds equity and locks in your principal-and-interest payment, but only makes sense if the payment fits your budget with room to spare. I’ll run a rent-versus-own comparison with your real numbers.

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