California First-Time Home Buyer: 2024 Programs and Grants

What to know about buying a house in California

Buying your first home can be a real challenge, especially in a state like California where prices are often sky-high.

Luckily, the Golden State has a variety of first-time home buyer loans and grants to help those who need an extra hand. Here’s how to get started.

In this article (Skip to…)

• CA home buyer programs
• First-time buyer grants
• CA home buyer key stats
• Home loan options
• Buying in California’s cities
• Resources
• CA mortgage rates

California first-time home buyer programs

For California home buyers, a good place to start looking for assistance is the California Housing Finance Agency (CalHFA)⁴. This agency offers a wide range of first-time home buyer loan programs at its own special interest rates.

To qualify for any of CalHFA’s special mortgage loans, you’ll need to:

• Be an eligible first-time home buyer
• Complete a home buyer education course
• Meet CalHFA’s median income limits⁵
• Have a minimum credit score of 660-680, depending on the program
• Purchase a primary residence within the state of California

CalHFA offers an eight-hour online home buyer education course for just $99. Participation is mandatory if you want to be eligible for financial help from the agency. And, it facilitates one-on-one counseling sessions for home buyers, which can be face-to-face or virtual. But fees vary depending on the service you choose.

CalHFA FHA loan

The CalHFA FHA loan program is guaranteed by the Federal Housing Administration and features a 30-year mortgage with a fixed interest rate. You can use this loan to purchase a single-family home or approved condominium.

CalPLUS FHA loan

The CalPLUS FHA program is another government-backed mortgage that comes with a slightly higher interest rate than its standard FHA loan. However, this home loan is combined with a closing cost assistance program, called the CalHFA Zero Interest Program (ZIP).

Similar to the CalHFA FHA loan, this program features a 30-year mortgage that will finance the purchase of a single-family primary residence.

CalHFA VA loan

Eligible veterans and active-duty service members have access to this VA-insured mortgage with a 30-year loan term and fixed-interest rate. The CalHFA VA program can be used to finance the purchase of a single-family home or condo.

CalHFA USDA loan

This 30-year, fixed-rate loan is backed by the USDA and comes with down payment assistance, called the “MyHome Assistance Program.” In addition to CalHFA guidelines, applicants to the CalHFA USDA program must meet both USDA income limits and eligible rural area requirements to qualify.

CalHFA conventional loan

The CalHFA conventional program is a 30-year mortgage with a fixed interest rate. Like all conventional loans, you’ll have to pay for private mortgage insurance when your down payment is less than 20% of the home purchase price.

CalPLUS conventional loan

This 30-year, fixed-rate loan comes with a slightly higher mortgage rate than the standard conventional home loan. But the CalPLUS conventional program comes paired with the MyHome and ZIP programs that will cover both your down payment and closing costs.

CalVet home buyer program

The CalVet program is open only to veterans, service members, and those in closely associated groups. It says its website “is designed to help you understand the steps to homeownership and discover just how easy and stress-free purchasing a home and securing a CalVet home loan can be.”

The agency provides special VA loan options that can help veterans who wish to buy homes in the Golden State. You can call CalVet loan originators to check your eligibility at (866) 653-2510 (Monday-Friday, 8 a.m.-5 p.m.).

The Dream For All Shared Appreciation Loan

The Dream For All Shared Appreciation Loan is a down payment assistance program for first-time homebuyers and provides funding up to 20% of the home’s sales price. It is to be used in conjunction with the Dream For All Conventional first mortgage for down payment and/or closing costs.

As the program name implies, you will need to repay the original down payment loan plus a share of the appreciation in the value of the home. So for example, if you receive a 20% down payment loan toward your new home, the state housing authority will collect 20% of the increased value when you sell, transfer, or refinance the home.

As with most down payment assistance programs, you’ll need to meet the minimum credit score requirements and stay within the county income limit. You must also complete a homebuyer education course before closing.

California first-time home buyer grants

The Golden State has countless down payment assistance programs (DPAs) that can provide financial help toward your down payment and often closing costs.

Some of those are local and serve specific counties or cities. But here are the details of the main statewide programs.

CalHFA MyHome Assistance

Qualifying home buyers could borrow up to 3.5% toward their down payment and closing costs under the CalHFA MyHome Assistance Program.

To qualify for MyHome down payment assistance, buyers must:

• Be a first-time home buyer
• Purchase a single-family home
• Live in the home as their primary residence
• Complete home buyer education counseling
• Meet income limits

Note, this program previously imposed a $15,000 cap for borrowers, which was eliminated in 2022, meaning that borrowers can now access the full 15% of their loan amount.

Regardless of whether that $15,000 cap applies, you can't borrow more than:

• 3.5% of the home purchase price or appraised value, whichever is less, for an FHA loan
• 3% of the home purchase price or appraised value, whichever is less, for a conventional, VA, or USDA loan

These are loans (a.k.a. “second mortgages” or “junior loans”) rather than grants. However, they’re deferred-payment loans. That means you don’t have to make monthly payments. Instead, you pay back the whole amount (plus interest) when you move, sell, refinance, or otherwise change the ownership of your home.

CalHFA Accessible Dwelling Unit (ADU) Grant Program

As part of the 2023-24 State Budget, $25 million has been allocated to The CalHFA ADU Grant Program. This initiative provides up to $40,000 for pre-development costs and non-reoccurring closing costs to build the ADU.

To qualify for The CalFHA ADU Grant assistance, buyers must:

• Meet income limits
• Live in the home as their primary residence
• Complete and sign the CalHFA Participant Affidavit
• Provide a Certificate of Occupancy upon completion of the ADU

To build an ADU and take advantage of this new California homeowner grant, reach out to CalHFA-approved mortgage lenders, non-profits, and local government agencies.

Pathway to Homeownership Closing Cost Assistance

The California Association of Realtors’ (C.A.R.) Housing Affordability Fund’s (HAF) Pathway to Homeownership Closing Cost Assistance grant program was established in 2022, with the goal of providing closing cost assistance to eligible first-time California home buyers. Eligible recipients could get up to $10,000 in grant funds to help cover closing costs.

To qualify for the Pathway to Homeownership Closing Cost Assistance grant program, you must:

• Be a first-time home buyer in California
• Be a member of a designated Underserved Community
• Buy a single-family residence
• Live in the home as their primary residence
• Meet income limits
• Be represented by a member of the California Association of Realtors
• Be left with no more than $20,000 in savings after the home purchase

Forgivable Equity Builder Loan

The Forgivable Equity Builder Loan is a newer California home buyer program that aims to help first-time homeowners buy property more affordably. Via this program, buyers can get a loan of up to 10% of the purchase price which is forgivable after five years, provided they continue to live in the property full-time during that period.

To qualify for the Forgivable Equity Builder Loan, you must:

• Be a first-time home buyer in California
• Buy a single-family, one-unit residence
• Live in the home as your primary residence
• Complete a home buyer education course if borrowing through CalHFA
• Meet county income limits

California home buyer key stats

The median home sales price in California was $785,600 in February 2024, an increase of 11.4% year-over-year, according to Redfin. California home prices continue to outpace the national average by quite a bit.

Remember that the Golden State offers plenty of assistance in the form of home buyer education, special mortgages, and down payment assistance. So eligible first-time buyers could be in line for some real help if they apply.

California home buyer stats

Down payment amounts are based on the state's most recently available average home sale price. "Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

California first-time home buyer loans

If you’re a California first-time home buyer with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved a 20% down payment. Doing so could be especially challenging in California, where 20% of the average sales price is nearly $160,000.

But the good news is that you don’t need 20% down. Not by a long shot. California home buyers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

• Conventional 97: With Freddie Mac or Fannie Mae, you may qualify with a 3% down payment and 620 minimum credit score. You can usually stop paying private mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration, you could qualify for an FHA loan with a 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans and active-duty service members, the VA mortgage offers a zero-down-payment option. Minimum credit score varies by lender but often 620. There’s no ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• CalHFA mortgage programs: Government and conventional home loans offered via the California Housing Finance Agency. Offers 30-year fixed-rate first mortgages along with home buyer assistance

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.

Buying a home in California’s major cities

California’s big cities are some of the most costly in the nation. So home buyers in these areas will want to know what to expect.

Los Angeles first-time home buyers

The median listing price in Los Angeles was $1.2 million in February 2024, according to Realtor.com. That rose 6% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $36,000 for 3% down payment
• $240,000 for 20% down payment

The City of Los Angeles Housing and Community Investment Department (HCIDLA) has a couple of programs that can help first-time buyers. These include the Low Income Purchase Assistance (LIPA) program and the Mortgage Credit Certificate (MCC).

The LIPA program can provide deferred payment loans of up to $140,000 to low-income borrowers to be applied to the down payment and closing costs. These loans have no monthly payments and are repayable when you move or refinance.

There are similar programs for those buying outside the LA city limits run by the Los Angeles County Development Authority.

San Diego first-time home buyers

The median home listing price in San Diego was $949,900 in February 2024, an annual increase of 1.4%, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might include:

• $28,497 for 3% down payment
• $189,980 for 20% down payment

The San Diego Housing Commission (SDHC) First-Time Homebuyer Program offers access to several types of help, including deferred loans, homeownership grants, and down payment and closing cost assistance.

Via the SDHC, San Diego first-time home buyers might be eligible for down payment or closing cost assistance up to $10,000 or 4% of the home purchase price, whichever is less. The city even offers a deferred-payment assistance loan of up to 22% of the purchase price.

San Jose first-time home buyers

The median home listing price in San Jose was $1.2 million in February 2024, according to Realtor.com. That decreased 8.3% year-over-year.

If you want to buy a home at that median price, your down payment options could range between:

• $36,000 for 3% down payment
• $240,000 for 20% down payment

Housing Trust Silicon Valley has a program called Empower Homebuyers SCC, which can lend you up to 30% of your next home’s appraised value (with strings).

This is another deferred loan, meaning you make no monthly payments but have to pay the whole amount back “when the loan matures, you decide to sell, or you refinance your mortgage.” This is also an equity-sharing program, meaning the Housing Trust will be entitled to a share of the equity you build in your home.

The website explains:

“You will share your appreciation in equal proportion to the amount you borrowed. This means if your loan was 30% of the purchase price, you will share 30% of the appreciation and the rest of the equity that builds up on your home over time is yours.”

“For instance, if you buy a house for $600,000 and use Empower to borrow 20% ($120,000) for the down payment, and the home is later sold for $800,000, you would owe a total of $160,000 (the original loan amount of $120,000, plus $40,000/20% of the $200,000 appreciation).”

Of course, you have to have 3% of the purchase price saved to benefit. But then you can put down 20%, which should get you a low mortgage rate and save you from paying any form of mortgage insurance.

If your income is too high for that program, the Homebuyer Empowerment Loan Program (HELP) is an alternative, also run by Housing Trust Silicon Valley.

Where to find home buying help in California

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the state of California.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides access to a few lists of statewide, regional, and local resources.

Statewide and regional CA home buying programs

• California Housing Finance Agency (CalHFA): Home buyer programs, including downpayment and closing cost assistance, and foreclosure prevention resources
• CalVet Home Loans: For Veterans to buy a home in California
• Community Contacts: Find out if your community offers homeownership assistance
• HUD approved housing counseling agencies
• State of California Housing and Community Development
• The Dream For All Shared Appreciation Loan

California home buying programs by city and county

• CA home buyer programs by city
• CA home buyer programs by county

What are today’s mortgage rates in California?

You can see today’s live mortgage rates in California here.

When you’re ready to start the home buying process, experiment with a mortgage calculator to see how down payment and interest rates will affect your mortgage payment. Then make sure you get personalized rate quotes from at least three to five mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.

¹ Source: Redfin California Housing Market Report

² Source: Experian 2022 study of 2021 and 2020 data

³ Based on a review of the state's available DPA grants at the time this was written

⁴California Housing Finance Agency

⁵ Income Limits for CalHFA Home Buying