California down payments range from 3% to 20% of the purchase price, depending on the loan type and your financial situation

The amount you put down when buying a house in California is not fixed by the state—it depends on which mortgage program you use. Conventional loans typically require 5% to 20% down. FHA loans (Federal Housing Administration) allow as little as 3.5% down. VA loans (for military members and veterans) often require 0% down. USDA loans (for rural areas) also allow 0% down in some cases. The lower your down payment, the higher your monthly mortgage payment and the more interest you pay over the life of the loan.

California's median home price varies widely by county—from under $400,000 in some inland areas to over $1 million in coastal regions. This means your actual dollar amount down will depend on where you buy. A 10% down payment on a $500,000 home is $50,000; on a $1 million home, it is $100,000. Lenders also look at your credit score, debt-to-income ratio, and savings history when deciding whether to accept a lower down payment.

Key Takeaways

  • FHA loans allow down payments as low as 3.5%, while conventional loans typically start at 5%, and VA or USDA loans may require nothing down.
  • Putting down less than 20% on a conventional loan means you will pay PMI (private mortgage insurance) each month until you reach 20% equity.
  • Your credit score, debt-to-income ratio, and cash reserves all affect whether a lender will accept your down payment amount.
  • First-time buyer programs in California may offer down payment assistance or allow lower percentages, but requirements vary by county and lender.

Conventional loans and the 20% benchmark

Conventional loans are mortgages not backed by a federal agency. Most conventional lenders prefer 20% down because it eliminates the need for PMI (private mortgage insurance). PMI protects the lender if you default; it is added to your monthly payment and typically costs 0.5% to 1.5% of your loan amount per year. On a $500,000 loan with 10% down, PMI might add $200 to $300 per month.

You can put down less than 20% on a conventional loan—5%, 10%, or 15% are common—but you will pay PMI until your equity reaches 20%. Once you hit that threshold through a combination of payments and home appreciation, you can request PMI removal. This process varies by lender; some remove it automatically, others require you to ask. The lower your down payment, the longer PMI stays on your loan.

FHA loans and 3.5% down

FHA loans are designed for borrowers who cannot save a large down payment. The minimum down payment is 3.5% if your credit score is 580 or higher. If your score is between 500 and 579, some lenders will allow FHA loans but may require 10% down. FHA loans are popular in California because they have more flexible credit and income requirements than conventional loans.

The trade-off is that FHA loans require mortgage insurance premiums (MIP), which are different from PMI. You pay an upfront MIP of 1.75% of the loan amount at closing, and then an annual MIP added to your monthly payment. Unlike conventional PMI, FHA mortgage insurance does not automatically disappear when you reach 20% equity. If you put down less than 10%, you pay MIP for the life of the loan. If you put down 10% or more, MIP drops off after 11 years.

VA and USDA loans with no down payment

If you are a military member, veteran, or surviving spouse, you may may have access to for a VA loan through the Department of Veterans Affairs. VA loans require 0% down and do not require PMI or mortgage insurance. You do pay a VA funding fee (typically 2.3% of the loan amount for first-time users), which can be rolled into the loan or paid upfront. VA loans are available throughout California and often have lower interest rates than conventional or FHA loans.

USDA loans are for rural and some suburban areas and also allow 0% down for borrowers who meet income limits. USDA loans require a may provide fee (similar to a funding fee) and an annual fee, but no PMI. To use a USDA loan in California, your property must be in an may be able to access rural area—the USDA website has a map showing which zip codes may have access to. Many areas in the Central Valley, northern California, and inland regions are may be able to access.

Down payment assistance programs in California

California offers several programs to help with down payments. The California Housing Finance Agency (CalHFA) runs programs like the Conventional 97 loan, which allows 3% down on conventional loans, and the CalHFA Adjustable Rate Mortgage (ARM), which also accepts lower down payments. Some programs offer grants or forgivable loans that do not have to be repaid if you stay in the home for a set period.

Individual counties and cities also run down payment assistance programs. San Francisco, Los Angeles, San Diego, and other major cities have local programs with varying requirements. Many are limited to first-time buyers or borrowers below a certain income level. Your lender or a local housing counselor can tell you which programs you may be able to use. The California Department of Housing and Community Development maintains a list of resources by county.

How down payment size affects your monthly payment

A larger down payment lowers your loan amount, which lowers your monthly mortgage payment. It also reduces the total interest you pay over 30 years. On a $500,000 home at 7% interest, the difference is significant: 5% down ($25,000) means a loan of $475,000; 20% down ($100,000) means a loan of $400,000. The monthly payment difference is roughly $400 to $500 before taxes and insurance.

However, a larger down payment also means less cash in your savings after closing. Most lenders want to see that you have reserves—typically three to six months of mortgage payments in the bank after you close. If putting down 20% leaves you with no emergency fund, a smaller down payment with PMI may be the safer choice. The goal is to balance a lower monthly payment against keeping enough cash on hand for repairs, property taxes, and unexpected costs.

Credit score and debt-to-income requirements

Your credit score affects both whether a lender will accept your down payment and what interest rate you receive. Conventional loans typically require a credit score of 620 or higher, though scores above 740 get better rates. FHA loans accept scores as low as 500, though 580 or higher is more common. VA loans have no official minimum credit score, but most lenders require 620.

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes to debt payments. Most lenders want your DTI below 43%, though some allow up to 50% with a larger down payment. If you have student loans, car payments, credit card debt, or other obligations, these count against you. A larger down payment can sometimes offset a higher DTI, but not always. Pay down existing debt before applying if you can.

Frequently Asked Questions

Can I borrow money for my down payment?

Most lenders require that your down payment come from your own savings, not from a loan. Borrowed money shows up as a new debt on your credit report and raises your DTI. Some programs allow a gift from a family member, but the gift must be documented and the giver cannot expect repayment. Ask your lender about their gift letter policy before accepting money from anyone.

What happens if I put down less than 3%?

Conventional loans do not go below 3% down. If you cannot save 3%, your options are FHA (3.5% minimum), VA (0%), USDA (0%), or down payment assistance programs. Some lenders offer portfolio loans with terms outside the standard range, but these are rare and usually have higher interest rates. A housing counselor can help you find programs in your area.

Does California have a first-time buyer down payment limit?

California does not cap down payments, but some first-time buyer programs have income limits or purchase price limits. CalHFA programs, for example, have maximum purchase prices that vary by county. Check the specific program rules before assuming you may have access to. Your lender can run through the requirements with you.

Can I remove PMI early if my home value goes up?

Home appreciation alone does not automatically remove PMI on a conventional loan. You must request PMI removal once you reach 20% equity through a combination of payments and appreciation. Some lenders allow you to refinance into a new loan with 20% down to eliminate PMI faster, but refinancing has closing costs. Compare the cost of refinancing against the cost of keeping PMI for the remaining years.

What if I am buying in a high-cost area like the Bay Area or Los Angeles?

High-cost areas mean larger dollar amounts down even at the same percentage. A 10% down payment in San Francisco or Los Angeles can easily be $100,000 or more. Down payment assistance programs, CalHFA loans, and lower-down-payment conventional options (3% to 5%) are especially useful in these markets. Some employers and nonprofits also offer down payment help for employees or members.