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

The amount you put down when buying a home in California is not fixed by state law — it depends on which mortgage program you use and what the lender requires. A conventional loan (one not backed by a government agency) typically asks for 5% to 20% down. Federal Housing Administration loans, known as FHA loans, allow as little as 3.5% down. Veterans Administration loans, or VA loans, often require no down payment at all if you are may be able to access. The lender will also look at your credit score, income, and debt to decide whether to accept a lower down payment or require more.

Putting down less money means you borrow more and pay more interest over time. It also means you will pay mortgage insurance — an extra monthly fee that protects the lender if you stop paying. Understanding what each loan type costs upfront helps you decide what you can actually afford, not just what a lender will allow.

Key Takeaways

  • Conventional loans in California typically require 5% to 20% down, while FHA loans allow 3.5% down and VA loans may require nothing.
  • Putting down less than 20% on a conventional loan means paying mortgage insurance monthly until you build enough equity in the home.
  • Your credit score, income, and existing debt affect whether a lender will accept a lower down payment or require more.
  • The total cost of a lower down payment includes both the interest on a larger loan and the cost of mortgage insurance.

Conventional loans and the 20% benchmark

A conventional loan is a mortgage that is not insured or may provide by a federal agency. Most conventional loans ask for a down payment between 5% and 20%. The 20% figure is a benchmark because it is the point at which lenders typically stop requiring mortgage insurance — but it is not a requirement.

If you put down less than 20%, you will pay private mortgage insurance, or PMI. This is a monthly fee added to your mortgage payment, usually between 0.5% and 1.5% of the loan amount per year, though the exact rate depends on your down payment size, credit score, and the lender. For example, on a $500,000 home with 10% down in California, PMI might add $200 to $400 per month to your payment.

You can remove PMI once you have paid down the loan to 80% of the home's original value, though this typically takes years. Some lenders allow you to request removal earlier if your home has increased in value and you refinance, but this varies by lender.

FHA loans and lower down payment options

An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency. FHA loans allow down payments as low as 3.5%, which makes them useful for buyers who do not have 5% to 10% saved. You do not need a perfect credit score — FHA loans accept scores as low as 580, though some lenders set their own higher minimums.

FHA loans require mortgage insurance, but it works differently than PMI on conventional loans. You pay an upfront mortgage insurance premium, or UFMIP, which is typically 1.75% of the loan amount and is usually rolled into your loan (meaning you borrow it). You also pay an annual mortgage insurance premium, or MIP, each month. Unlike conventional PMI, FHA mortgage insurance does not automatically disappear — it stays for the life of the loan if you put down less than 10%, or for at least 11 years if you put down 10% or more.

FHA loans have limits on how much you can borrow in California. These limits change each year and vary by county. In 2024, limits range from around $472,000 in lower-cost areas to over $1 million in expensive coastal counties. Check with your lender or the HUD website to find the current limit for your county.

VA loans for veterans and service members

If you are a veteran, active-duty service member, or surviving spouse of a veteran, you may be able to use a VA loan. VA loans often require no down payment at all, and they do not require mortgage insurance. This makes them one of the most affordable mortgage options available.

To use a VA loan, you need a Certificate of may be able to access from the Department of Veterans Affairs. You can request this through the VA website or ask your lender to help you obtain it. VA loans do charge a funding fee, which is a one-time cost that is usually rolled into the loan amount. The funding fee ranges from 1.4% to 3.6% of the loan amount, depending on whether this is your first VA loan and how much you are putting down.

VA loans have no county-specific borrowing limits in California, though individual lenders may set their own caps. The interest rates on VA loans are often competitive, and you cannot be charged certain fees that conventional borrowers pay.

How your credit score and debt affect your down payment

Lenders use your credit score — a three-digit number based on your payment history, how much debt you carry, and how long you have had credit — to decide how much risk you represent. A higher score usually means a lender will accept a lower down payment. A lower score may mean the lender requires 10% or 15% down instead of 5%, or may decline the loan altogether.

Your debt-to-income ratio, or DTI, also matters. This is the percentage of your monthly income that goes toward debt payments — mortgage, car loans, credit cards, student loans, and other obligations. Most lenders want your DTI to be 43% or lower, though some will go to 50% if your credit is strong. If your DTI is already high, a lender may require a larger down payment to reduce the size of the loan and keep your total monthly payment manageable.

If your credit score is below 620 or your DTI is above 50%, conventional loans become difficult to obtain. FHA loans are more flexible on both counts, which is why they are often the better choice for buyers in this situation.

Down payment information programs in California

California offers several programs that help buyers cover down payment costs. The California Housing Finance Agency runs the Homebuyer information Program, which provides grants and loans to first-time buyers in certain income ranges. Some counties and cities also run their own programs. These vary widely in what they cover, who qualifies, and how much they provide.

Nonprofit organizations and community banks in your area may also offer down payment help. These programs sometimes have fewer restrictions than government programs and may work with buyers who have lower credit scores or irregular income. Searching for "[your city] down payment information" or calling your local housing authority can point you toward what is available in your area.

Some employers and unions also offer down payment grants or loans to members. If you are part of a union or work for a large employer, ask your human resources or benefits department whether this is available to you.

Calculating what you can afford to put down

Your down payment is only one part of the total cost of buying a home. You also pay closing costs (typically 2% to 5% of the home price), property taxes, homeowners insurance, and mortgage insurance if applicable. Many buyers make the mistake of saving only for the down payment and then running out of money before closing.

A useful starting point: if you have saved $50,000, do not assume you can put all of it down. Set aside 20% to 30% of that for closing costs and when ready repairs or improvements. That leaves roughly $35,000 to $40,000 for the down payment. On a $500,000 home, that is 7% to 8% down, which means you will pay PMI or use an FHA loan.

Use a mortgage calculator to see how different down payment amounts change your monthly payment and total interest cost. Many lenders offer free calculators on their websites. Comparing a 5% down payment against 10% or 15% shows you the real difference in what you will pay over 30 years.

Frequently Asked Questions

Can I borrow money from family for my down payment?

Yes, but lenders require documentation. If a family member gives you money as a gift, the lender needs a signed letter stating it is a gift and not a loan you have to repay. If it is a loan, you must disclose it as a debt, which increases your DTI and may reduce how much you can borrow. Some lenders have rules about how long the gift money must sit in your account before you use it.

What happens if I put down less than 3%?

Conventional loans typically do not allow down payments below 3%, and FHA loans do not go below 3.5%. If you have less saved, you have a few options: save longer, use a VA loan if you are may be able to access, look for down payment information programs, or consider waiting to buy until you have more saved. Putting down very little increases your monthly costs significantly.

Does California have a state down payment requirement?

No. California does not set a minimum down payment — that is determined by the loan type and the lender. State law does require lenders to disclose all costs upfront, but the down payment amount itself is negotiable between you and the lender.

If I put down 20%, do I avoid all mortgage insurance?

On a conventional loan, yes — 20% down typically eliminates PMI. On an FHA loan, you still pay mortgage insurance even with 20% down, though it may be for a shorter period. VA loans have no mortgage insurance at any down payment level.

Can I increase my down payment after I start the loan process?

Yes. If you receive a bonus, inheritance, or other funds during the loan process, you can usually increase your down payment. Tell your lender as soon as possible so they can recalculate your loan amount, monthly payment, and mortgage insurance costs. This can save you significant money over the life of the loan.