If you think you need a massive down payment to buy a home in California, think again. The state offers some of the most generous first-time buyer programs in the country — and many buyers leave thousands of dollars on the table simply because they don't know these programs exist.
What Counts as a "First-Time Buyer"?
Most programs define a first-time buyer as someone who hasn't owned a home in the past three years. This means you could have owned a home a decade ago and still qualify. Some programs also include people who have only owned a home that wasn't their primary residence, or who owned a home that didn't meet building codes.
CalHFA Programs
The California Housing Finance Agency (CalHFA) administers several programs specifically for first-time buyers.
CalHFA Conventional Program
This program offers a 30-year fixed-rate conventional mortgage with competitive rates. Borrowers need a minimum 660 credit score and must complete homebuyer education. Income limits apply and vary by county — in high-cost counties like Los Angeles, Orange, and San Francisco, the limits are higher to account for local economics.
CalHFA FHA Program
Similar to the conventional program but uses FHA guidelines, which means lower credit score requirements (640 minimum through CalHFA) and potentially more flexible DTI limits. The trade-off is FHA's mandatory mortgage insurance.
MyHome Assistance Program
This is the big one — a deferred-payment junior loan of up to 3.5% of the purchase price (or appraised value, whichever is less) for down payment and closing cost assistance. "Deferred payment" means you don't make monthly payments on this loan. It comes due when you sell, refinance, or pay off the first mortgage. This can be combined with either CalHFA conventional or FHA first mortgages.
Zero Interest Program (ZIP)
Provides up to 3% of the loan amount as a zero-interest subordinate loan for closing costs. Like MyHome, it's deferred until you sell, refinance, or pay off the first mortgage.
FHA Loans for First-Time Buyers
FHA loans aren't technically a "first-time buyer program" — anyone can use them — but they're overwhelmingly popular with first-time purchasers because of their accessibility.
The 3.5% minimum down payment on a $700,000 home is $24,500 — significant, but far more manageable than the $140,000 needed for 20% down. And that entire down payment can come from gift funds — parents, grandparents, or other family members can contribute without the borrower needing any of their own savings for the down payment.
California's FHA loan limit of $1,209,750 in high-cost counties means this program covers a much wider range of properties than in most states.
The main drawback is mortgage insurance premium (MIP): an upfront fee of 1.75% plus an annual premium of 0.55% that lasts for the life of the loan (if you put less than 10% down). The only way to remove it is refinancing into a conventional loan once you have 20% equity.
VA Loans — The Best First-Time Buyer Program
If you have any military service — active duty, veteran, National Guard, or Reserve — VA loans offer the single best path to homeownership:
Zero down payment means you can buy a home with no money toward the purchase price. No PMI means your monthly payment is lower than any other zero-down option. Competitive rates that typically run 0.25-0.50% below conventional make the monthly savings meaningful over 30 years. And there's no maximum loan amount for borrowers with full entitlement.
In California, where the average home price makes saving for a down payment a multi-year endeavor, the VA loan's zero-down feature is transformative.
Local and City-Specific Programs
Many California cities and counties offer their own down payment assistance programs on top of state offerings.
Los Angeles offers programs through the LA Housing Department. San Diego has the San Diego Housing Commission's first-time buyer programs. San Francisco's Below Market Rate (BMR) program provides access to affordable housing units. Sacramento, Fresno, and other Central Valley cities often have the most generous local programs due to lower home prices and housing affordability goals.
Contact Save Financial to find out which local programs are available in your target city — these change frequently and combining them with CalHFA programs can significantly reduce your out-of-pocket costs.
How to Maximize Your Benefits
The key strategy is layering programs. For example, a first-time buyer in Los Angeles could potentially combine a CalHFA FHA first mortgage with a MyHome Assistance down payment loan and a local city program — resulting in very low out-of-pocket costs.
Here's a realistic scenario: purchasing a $650,000 home in Sacramento with a CalHFA conventional loan, MyHome Assistance (3.5% = $22,750 toward down payment), and the ZIP program (3% = $19,500 toward closing costs). Your out-of-pocket cost could be under $5,000.
Next Steps
Start the process early — CalHFA programs can take slightly longer to close than standard loans, so building in extra time helps. Get pre-approved, complete homebuyer education (required for most programs), and work with a lender experienced in navigating California's assistance programs. Save Financial guides dozens of first-time buyers through these programs every month.