What is the best first-time home buyer program in California?

For most California first-time buyers, the best starting program is CalHFA MyHome, which provides up to 3.5% of the purchase price as a deferred, 0% interest second mortgage forgiven after 3 years of occupancy. MyHome stacks with CalHFA first mortgage and most county or city programs. Bay Area buyers can layer San Francisco's BMR or Oakland's First-Time Homebuyer program ($50,000 to $200,000). Los Angeles buyers can layer LIPA (up to $110,000 deferred). The right stack depends on county, income, profession, and city-specific programs.

How much down payment do I need in California?

Minimums by loan type: FHA 3.5% with 580 FICO, conventional 3% to 5% with 620 to 740 FICO, VA 0% for eligible veterans, USDA 0% in eligible rural areas. First-time buyer programs reduce or eliminate out-of-pocket costs through deferred second mortgages. An eligible buyer can buy a $700,000 home with $0 out of pocket via CalHFA MyHome plus a county program. The catch: the second mortgage is due on sale or refinance, and may be taxable in some cases. Down payment assistance shifts the cost from your savings to a future repayment, not eliminates it.

What are the income limits for CalHFA?

CalHFA income limits vary by county and household size. 2026 limits range from $100,000 in low-cost counties to $250,000+ in high-cost counties (SF, San Mateo, Santa Clara). Rough guide: 4-person household in LA County up to $180,000, 4-person household in SF up to $245,000. Income limits apply to the household, not just the borrower. The program also requires no ownership in the past 3 years and primary residence occupancy.

Can I combine CalHFA with a county or city program?

Yes, and stacking is the right way to maximize assistance. CalHFA MyHome is designed to be combined with county and city programs. The most common stack is CalHFA first mortgage + CalHFA MyHome + city or county DPA, providing $30,000 to $200,000 in total. Start by looking up the city and county program where the home is located, since most are geographically restricted. CalHFA's website lists participating jurisdictions. A CalHFA-approved loan officer can walk through stacking options for a specific property.

What credit score do I need for a California first-time home buyer program?

FHA loans need 580 FICO for 3.5% down. Conventional CalHFA needs 680 in most cases. VA loans are more flexible with no formal minimum but most lenders want 620+. Credit score is one of three qualification factors; DTI and down payment matter as much. Target: 740+ for the best rates, 680 to 739 competitive, 620 to 679 workable with higher rates, below 620 FHA-only with credit repair first. CalHFA's Self-Help program through HUD-approved counseling has more lenient credit requirements.

Are CalHFA loans forgivable?

CalHFA MyHome is a 0% interest deferred second mortgage forgiven after 3 years of owner-occupancy. The forgiveness is prorated if you sell or refinance before the 3-year mark. STEAP (CalHFA School Teacher and Employee Assistance) is a fully forgivable grant, better for teachers. Cal-Vet is a separate purchase money mortgage for veterans, not forgivable. MyHome forgiveness is not federal taxable income, but California treatment varies. Check with a tax advisor before selling or refinancing. The 3-year occupancy is a commitment: selling early triggers partial repayment.

California First-Time Home Buyer Programs in 2026

California hands out more first-time buyer help than any other state, and most buyers claim one program when they could have stacked three. The gap between the two outcomes is usually five figures at closing.

What California actually offers first-time buyers in 2026

California runs the most aggressive first-time buyer assistance in the US, with three state-level programs plus 30+ local down-payment-assistance (DPA) programs that layer on top. CalHFA, the state's housing finance agency, is the umbrella. CalHFA MyHome offers up to 3.5% of the purchase price in deferred, 0% interest down-payment assistance. CalPLUS FHA pairs a CalHFA first mortgage with a 0% interest, deferred second mortgage for the down payment. The CalHFA Conventional program works with a 3% down conforming loan and lets buyers stack local DPA on top.

The income and purchase-price limits change every year. For 2026, the statewide CalHFA income ceiling for a 1 to 2-person household is around $185,000 to $210,000 depending on county, and the purchase price ceiling ranges from about $750,000 in expensive metros to $1.2M in less competitive areas. Most local DPA programs add their own lower income caps, so the practical eligibility is the strictest of the two.

The three state programs at a glance

Program	Down payment help	Rate	Best for
CalHFA MyHome	Up to 3.5% of price (max $10,000–$15,000)	Deferred 0% second	First-time buyers with FHA, VA, or USDA loan
CalPLUS FHA	3.5% of price deferred	Higher first-mortgage rate	Buyers needing 100% financing
CalHFA Conventional	None directly, but stacks with local DPA	Standard conforming	Buyers combining state + city/county help

CalHFA MyHome is the workhorse. It provides a deferred second mortgage at 0% interest that the buyer repays only when they sell, refinance, or pay off the first mortgage. The second mortgage is silent debt: no monthly payment, no interest accrual. For a $500,000 home, MyHome provides $17,500 in down-payment help, which covers a 3.5% down FHA loan with closing costs in most metros.

CalPLUS FHA: when 100% financing is the only path

CalPLUS FHA pairs a CalHFA first mortgage with a 3.5% silent second. The first-mortgage rate is slightly higher than a standard FHA rate (typically 0.25% to 0.5% above market) because CalHFA is buying down the rate on the second. The trade-off: the buyer gets 100% financing with no down payment and no PMI after 22% equity. The right borrower for CalPLUS is one who can afford the monthly payment but cannot save the 3.5% down plus closing costs in cash.

CalHFA Conventional: the stacker

CalHFA Conventional is a 3% down conforming loan that doesn't include state DPA on its own. The value is that it lets buyers layer city or county DPA programs on top, and CalHFA treats the stacked assistance as separate subordinate financing. Buyers in Los Angeles, San Diego, Oakland, and Sacramento can often stack $20,000 to $50,000 in local assistance on top of a 3% conventional down payment.

Local programs worth stacking

Every major California city and most counties run their own DPA program. The assistance is typically a silent second at 0% to 3% interest, forgiven after 5 to 15 years of owner-occupancy. Los Angeles runs the Moderate Income Purchase Assistance (MIPA) program at up to $200,000 in some configurations, with income caps around $160,000 for a household of 4. San Diego's First-Time Homebuyer Program offers up to 4% of the purchase price. Oakland's CalHome program layers on top of CalHFA.

Teacher and public-servant programs add another layer. CalHFA School Facility Employee Housing Assistance offers deferred loans to K-12 employees. The Educator Housing Reward Program in San Francisco gives a $20,000 grant to teachers. CalFire, Caltrans, and CHP employees have agency-specific housing programs in some counties. The right way to find these is the county's housing authority website plus a conversation with a CalHFA-approved loan officer who has closed other local DPA stacks.

Income, credit, and purchase-price limits

CalHFA income limits vary by county and household size. The expensive metros (SF, San Mateo, Santa Clara, Marin) cap household income around $185,000 to $240,000 for a 1 to 4-person household. The inland counties (Fresno, Bakersfield, Riverside) allow household income up to $110,000 to $130,000. The purchase price ceiling follows the same pattern, with expensive metros around $750,000 to $1.2M and inland areas up to $600,000 to $800,000.

Credit requirements are a 640 minimum FICO for most CalHFA loans, with better pricing for 680 and above. The first mortgage uses standard FHA, VA, USDA, or conventional underwriting. Local DPA programs add their own credit requirements, sometimes as high as 720. The realistic target is 680+ to qualify for both state and local programs at favorable rates.

First-time buyer status applies to anyone who hasn't owned a primary residence in the past 3 years. Some local programs extend this to veterans, displaced homemakers, or buyers in targeted census tracts. CalHFA-approved loan officers can pre-qualify you across state and local programs in a single application.

The application process

CalHFA works through a network of approved lenders, not directly with buyers. The first step is to find a CalHFA-approved loan officer, ideally one who has stacked your county or city program recently. The second step is to complete CalHFA's MyHome or CalPLUS reservation, which is a separate application from the mortgage pre-approval. Reservations are first-come, first-served, and most programs run out of funding in 6 to 9 months, so apply before you find a home, not after.

The timeline from reservation to close is typically 45 to 75 days. The buyer needs a fully executed purchase contract within the reservation window (usually 60 to 90 days), a CalHFA-approved appraisal, and standard FHA or conventional documentation. Closing costs run 2% to 5% of the purchase price on top of the down payment, and most CalHFA programs allow the seller to pay up to 3% to 6% of the buyer's closing costs.

What the assistance actually saves

On a $600,000 home with a 3.5% FHA loan, CalHFA MyHome provides $21,000 in down-payment help and the buyer needs roughly $18,000 to close, including the $21,000 deferred second. Without assistance, the same buyer needs $21,000 down plus $15,000 to $25,000 in closing costs, or $36,000 to $46,000 in cash at close. MyHome cuts that to $18,000 to $24,000 in cash.

Stacked assistance goes further. A Los Angeles buyer with CalHFA MyHome ($21,000), LA MIPA ($50,000), and seller-paid closing costs (3% = $18,000) can close on a $600,000 home with $0 out of pocket. The trade-off is a 30-year obligation to occupy the home, with the silent seconds becoming due on sale or refinance. For buyers who plan to stay 7+ years, stacked California assistance is the cheapest path to homeownership in the country.

Common mistakes that block approval

The first mistake is applying for the loan before reserving CalHFA assistance. The reservation must be in place before the purchase contract is signed in most counties. The second mistake is choosing a home above the CalHFA or local program price ceiling, which voids the assistance and may require re-underwriting. The third is missing the income documentation deadline. CalHFA requires 30 days of pay stubs, 2 years of W-2s, 2 months of bank statements, and a signed borrower certification. Incomplete files pause the reservation and may release the funds to the next applicant.

Buyers should also be careful with credit. Opening a new credit card, financing a car, or making a large purchase in the 60 days before closing can change the debt-to-income ratio enough to push the loan out of compliance. The right move is to lock down the credit profile 90 days before applying and keep it frozen through closing.

Photo: Philip Mallis, CC BY, via Wikimedia Commons (https://upload.wikimedia.org/wikipedia/commons/e/e6/House_on_suburban_street_in_Sunshine%2C_Victoria.jpg?utm_source=commons.wikimedia.org&utm_campaign=imageinfo&utm_content=original)