California First-Time Homebuyer Programs 2025

If you are a first-time homebuyer in California, you know how difficult it is to find an affordable home. California’s housing market has long been challenging for first-time buyers, and recent interest rates and limited inventory have worsened affordability.

As of April 2025, the median home price in California was over $850,000. But that does not mean the dream is off the table. Having the right resources, guidance, and knowing how to access California first-time home buyer programs is more important than ever.

In California, a first-time homebuyer is defined as someone who hasn’t owned a principal residence in the past three years. This definition opens the door for many who may not consider themselves “first-time” in the everyday sense but still qualify for important assistance programs. Additionally, it means that those who own investment properties may still qualify.

California’s state-backed initiatives to make homeownership more attainable with first mortgage payment programs, down payment assistance programs, and closing cost support. These tools help lower the barrier to entry and create real opportunities to own a home, even in one of the nation’s most expensive markets.

CalHFA First Mortgage Programs

California’s Housing Finance Agency (CalHFA) offers several first mortgage programs explicitly designed for first-time homebuyers. These programs provide more than just financing. They offer stability through fixed-rate loans and unlock access to valuable assistance options.

CalHFA Conventional Loan Program

The CalHFA Conventional Loan is a 30-year fixed-rate mortgage available to eligible first-time buyers.

This loan follows Fannie Mae’s HomeReady® guidelines, meaning it’s designed to assist low- to moderate-income borrowers. Unlike most conventional loans, it can be paired with CalHFA’s down payment and closing cost assistance to help reduce upfront expenses. However, borrowers who aren’t using downpayment or closing cost assistance programs may be eligible for a lower interest rate.

CalHFA Conventional Loans require:

• Minimum Credit Score: 660 (680 if purchasing a manufactured home)
• Down Payment Requirement: Typically 3%
• Occupancy: Primary residence

They are best for buyers with moderate income levels who want a conventional loan structure and can remove mortgage insurance after building equity.

Buyers must fall within CalHFA’s income limits, which vary by county. These limits ensure the program targets buyers who may be priced out of traditional financing options but still earn enough to support a mortgage. For example:

• In Alameda and San Francisco Counties, the 2025 income cap for a CalHFA Conventional Loan is $300,000
• In counties like Fresno or Madera, the cap is closer to $174,000.

CalHFA FHA Loan Program

The CalHFA FHA Loan Program is a 30-year, fixed-rate mortgage insured by the Federal Housing Administration (FHA). It is specifically designed for first-time buyers who may need more flexible credit and debt-to-income requirements than a conventional loan allows.

It has a lower credit score requirement than the CalHFA Conventional Loan program but does require a slightly higher down payment. As with the CalHFA Conventional Loan, income limits vary by county and are updated annually.

CalHFA FHA Loans require:

• Minimum Credit Score: 640
• Down Payment Requirement: 3.5%
• Occupancy: Primary residence

A downside of CalHFA FHA loans is that they require mortgage insurance for the life of the loan, unlike conventional loans, which can be removed once owners have a certain amount of equity. These loans are best for low- to moderate-income earners with lower credit scores, limited savings, or those needing a more lenient debt-to-income ratio.

VA Loan with CalHFA Assistance

The CalHFA VA Loan Program is a 30-year, fixed-rate mortgage backed by the U.S. Department of Veterans Affairs (VA). It is designed for eligible veterans, active-duty service members, and certain surviving spouses. This program offers below-market interest rates and does not require a down payment or monthly mortgage insurance.

When used alone, it does not require the borrower to be a first-time homebuyer. However, when paired with the MyHome Assistance Program, the first-time homebuyer requirement applies, and homebuyer education is also required.

CalHFA VA Loans require:

• Minimum Credit Score: 640
• Down Payment Requirement: 0%
• Occupancy: Primary residence
• VA Eligibility

This loan is ideal for veterans or active-duty military who want affordable financing, no down payment, and no ongoing mortgage insurance. It provides added flexibility for those who do not meet the first-time homebuyer definition unless they choose to combine it with down payment assistance through MyHome.

USDA Loan with CalHFA Aid

The USDA Loan with CalHFA assistance is a 30-year, fixed-rate mortgage backed by the U.S. Department of Agriculture. It is designed for buyers purchasing a home in eligible rural areas and offers 100% financing with no required down payment.

CalHFA does not originate USDA loans directly. Instead, buyers apply through CalHFA-approved lenders who offer USDA financing. If eligible, buyers can combine a USDA loan with MyHome Assistance and ZIP to reduce or eliminate upfront costs.

USDA Loans with CalHFA aid require:

• Minimum Credit Score: 640
• Down Payment Requirement: 0%
• Occupancy: Primary residence located in a USDA-eligible rural area

CalHFA Down Payment Assistance

For many first-time homebuyers in California, the biggest barrier to homeownership isn’t the monthly mortgage but the upfront costs. CalHFA’s down payment and closing cost assistance programs help fill the gap, reducing or eliminating the need for large upfront payments.

MyHome Assistance Program

The MyHome Assistance Program helps ease the burden of down payment and closing costs. It offers a deferred-payment junior loan that can be combined with most CalHFA first mortgage programs. Because it doesn’t require monthly payments, it gives buyers more flexibility and affordability when entering the market. The assistance amount offered by MyHome is up to 3% of the purchase price when paired with a conventional loan and up to 3.5% when paired with an FHA loan.

For example, a buyer using a CalHFA mortgage can combine it with the MyHome Assistance Program to get part of their required down payment and closing costs covered by a deferred-payment loan. Instead of paying these expenses upfront, the buyer won’t need to repay it until they sell, refinance, or move out. This assistance is especially valuable for buyers who can afford a mortgage payment but haven’t been able to save enough (often due to high rent expenses) to cover upfront expenses.

California Dream For All Shared Appreciation Loan

The California Dream For All Shared Appreciation Loan (DFA) is a program made in recognition of the impact homeownership has on generational wealth. This program offers substantial down payment assistance for eligible first-time homebuyers but more directly focuses on first-generation homebuyers. To qualify, all borrowers must be first-time homebuyers, with at least one borrower being a first-generation homebuyer.

This program provides up to 20% of the home’s purchase price or a maximum of $150,000 as a shared appreciation loan. Like the MyHome Assistance Program, the funds borrowers get through DFA have to be paid back when the property is sold or refinanced, which is why it’s called a shared appreciation loan. When the property is sold or refinanced, the state housing authority will collect the initial 20% plus a percentage of how much the home has appreciated over time.

For example, a buyer using a CalHFA first mortgage may apply for the Dream For All program to receive a large portion of their down payment as assistance. Rather than paying the loan back with interest, the buyer will repay the original loan amount plus a share of the home’s increased value later. This program can make homeownership possible for buyers priced out due to high down payment requirements and helps borrowers avoid mortgage insurance.

However, it comes with long-term financial considerations. Funding is limited and distributed through a lottery or phased rollout process. Applicants must apply during a limited application window; the next application window is expected to open in 2026.

Zero Interest Program (ZIP)

The Zero Interest Program (ZIP) helps buyers cover closing costs when using a CalPLUS loan through CalHFA. It provides up to 3% of the loan amount as a deferred-payment junior loan with zero interest on that amount. This program is only available when paired with a CalPLUS FHA or CalPLUS Conventional loan.

Similar to other programs, the ZIP loan must be repaid in full when any of the following events occurs:

• The home is sold or transferred
• The mortgage is refinanced
• The borrower no longer occupies the home as a primary residence
• The CalHFA mortgage is paid off

For example, a buyer using a CalPLUS mortgage can add ZIP assistance to cover closing costs without increasing their monthly expenses, therefore not impacting their borrowing capacity. The ZIP loan does not require monthly payments and carries no interest, making it an affordable way to reduce upfront costs at closing. It is especially useful for buyers who have saved for a down payment but need help handling final transaction fees.

General Eligibility Requirements

Qualifying for CalHFA’s first-time homebuyer programs involves more than being a new buyer. Each program has specific criteria that evaluate your income, credit score, homebuyer status, and the type of property you’re purchasing. Knowing these requirements in advance can help you avoid delays and submit a stronger application.

Income Limits and Household Size

CalHFA programs have more flexible income limits than most other states, but they are designed to help those who need them most. These limits vary by county and are adjusted annually based on local housing costs and the number of people in the household. Larger households generally have higher income limits because they have greater living expenses.

Unlike some loan programs that consider total household income, CalHFA focuses on the qualifying borrower’s gross income, which includes income before taxes or deductions. Documentation such as recent pay stubs, tax returns, and employment verification are used to determine eligibility.

It’s important to note that income limits can differ significantly between regions. For example, buyers in high-cost areas like San Francisco or Orange County can earn considerably more than those in rural counties like Merced or Kern and still qualify. This is because CalHFA aims to align its limits with local economic conditions and housing prices to ensure fair access across the state.

Understanding where your income falls relative to your county’s limit is one of the first steps to determining program eligibility. CalHFA’s website offers a search tool that makes it easy to check current limits by location and household size.

Credit Score Requirements

CalHFA programs have minimum credit score requirements that vary depending on the type of loan. These requirements help lenders assess a buyer’s ability to manage debt responsibly and repay the loan over time. While the thresholds are relatively accessible, buyers with higher scores may receive better interest rates and broader loan options.

Here are the minimum credit scores by loan type:

• CalHFA Conventional Loans: 680
• CalHFA FHA Loans: 640
• VA and USDA Loans: 640

These are baseline requirements. Some lenders may impose additional overlays, especially for buyers with higher debt-to-income ratios or minimal financial reserves.

First-Time Homebuyer Status

Most CalHFA programs require buyers to meet the definition of a first-time homebuyer, someone who has not owned and occupied a principal residence within the past three years. This rule is designed to help those re-entering the housing market or purchasing for the first time.

There are a few important exceptions. Buyers who previously owned a home but are now displaced homemakers or single parents may still qualify. For example, a single parent who previously owned a home jointly with a former spouse may be treated as a first-time buyer if they have not owned a property independently in the past three years.

To verify status, lenders typically require documentation such as tax returns, rental history, and a signed first-time homebuyer affidavit. If a buyer owns investment property but does not live in it, they may still qualify as a first-time buyer under CalHFA rules since the requirement is based on ownership of a principal residence.

Property Requirements

To qualify for CalHFA programs, the home being purchased must meet certain standards regarding location, type, condition, and occupancy. These rules ensure the property is safe, eligible for financing, and appropriate for long-term residence. Below is a summary of key property eligibility criteria buyers should be aware of:

Buyers planning to purchase a manufactured home should be especially mindful of the added requirements, including higher credit score minimums and more conservative underwriting. It’s also essential to ensure the home meets CalHFA’s condition guidelines before making an offer.

Property condition requirements are set to protect buyers, and all properties must undergo professional inspection and appraisal. To meet property condition requirements, homes being purchased with CalHFA must:

• Be in a safe, sanitary, and livable condition, meaning that no major plumbing, heading, electrical or structural work is required.
• Pass an appraisal ordered by the lender to verify market value.
• Considered move-in ready at the time of purchase.

If the appraiser identifies health or safety issues, those repairs must be completed before closing. CalHFA does not allow funds to be used for post-closing rehab or repairs.

Homebuyer Education Requirement

All first-time homebuyers using CalHFA assistance programs are required to complete an approved homebuyer education course. There are only two accepted education options:

• eHome America
  An online course that takes approximately 8 hours to complete and includes one-on-one counseling. This is the most commonly used option for CalHFA buyers.
• In-Person HUD-Approved Courses:
  Buyers can also complete an in-person education course offered by a HUD-approved counseling agency or virtually through NeighborWorks.

CalHFA does not accept homebuyer courses from certain platforms, including Framework and other non-partnered providers. Once the course has been completed, a certificate of completion must be submitted to the lender. Using a non-approved provider may result in delays or denial of assistance, so it’s important to verify the course in advance.

Common Disqualifying Factors

Even if a buyer meets credit and income requirements, certain issues can still disqualify them from CalHFA programs.

Here are some of the most common reasons applicants may be denied:

• High Debt-to-Income (DTI) Ratio
  Most CalHFA programs limit the DTI ratio to 45 percent. Some allow up to 50 percent with strong compensating factors.
• Insufficient Employment History
  Buyers generally need at least two years of stable employment or provable income in the same field. Long gaps or recent job changes may raise concerns during underwriting.
• Non-Occupant Co-Borrowers
  CalHFA does not allow non-occupant co-borrowers. All individuals listed on the loan must plan to live in the home as their primary residence.
• Ineligible Property Type
  Only one-unit, owner-occupied homes are allowed. Investment properties, vacation homes, and multi-unit properties do not qualify.
• Previous Use of CalHFA Assistance
  Buyers who have already used a CalHFA down payment assistance program in the past are not eligible to receive it again.
• Current Property Ownership
  Owning another residential property at the time of application is generally not allowed, even if the property is not the buyer’s primary residence.

Regional First-Time Homebuyer Programs

In addition to statewide California first-time homebuyer programs, many California cities and counties offer local first-time homebuyer programs with their own income limits, assistance amounts, and eligibility requirements. These programs can often be combined with CalHFA financing to further reduce out-of-pocket costs.

Los Angeles

The Los Angeles Housing Department (LAHD)offers two main assistance programs:

• Low-Income Purchase Assistance (LIPA): Provides up to $161,000 in down payment assistance for low-income first-time buyers purchasing within Los Angeles city limits.
• Moderate Income Purchase Assistance (MIPA): Offers between $90,000 and $115,000 in assistance for moderate-income buyers, depending on AMI.

How much borrowers are eligible for depends on their income in relation to the Area Median Income (AMI). Buyers must occupy the home as their primary residence, and both programs are subject to maximum home price and income limits, which vary based on household size. The assistance is a deferred-payment loan, meaning repayment is not required until the home is sold, refinanced, or transferred.

San Diego

The San Diego Housing Commission’s First-Time Homebuyer Program helps low- and moderate-income buyers purchase homes within San Diego city limits.

• Offers up to 25% of the home’s purchase price in a deferred payment, shared equity down payment assistance
• Includes up to $10,000 in closing cost support
• The property must be the buyer’s primary residence
• Buyers must complete a homebuyer education course and meet income and purchase price limits

This program is useful for buyers struggling with high home prices in the San Diego area.

San Francisco

The Bay Area faces some of the most extreme affordability challenges in the country. The Downpayment Assistance Loan Program (DALP) is one of the most generous city-sponsored programs in California, offering:

• Up to $500,000 in down payment assistance
• Structured as a shared appreciation loan, repaid when the home is sold or refinanced
• Funds are distributed through a lottery system due to high demand
• Priority is given to applicants who meet specific criteria, such as San Francisco residents or employees of the city

Buyers must work with an approved lender and complete a homebuyer education program before applying. Applications are only open for a limited period, closing on June 2, 2025, for this year. Lottery results will be posted on June 25, 2025.

Orange County

The Mortgage Assistance Program (MAP) supports first-time homebuyers in participating cities within Orange County.

• Provides up to 20% of the purchase price, with a maximum of $80,000
• Offered as a silent second loan, with no monthly payments and deferred repayment
• Buyers must meet income limits, occupy the property as their primary residence, and contribute a portion of their own funds

MAP can be used with other assistance programs, including those offered through CalHFA. Other counties besides Orange County also offer similar programs.

Application Process

Applying for a CalHFA loan with down payment or closing cost assistance involves several key steps. Understanding the process ahead of time can help buyers stay organized and avoid delays. Here’s what to expect:

1. Find a CalHFA-Approved Lender

CalHFA does not lend directly to buyers. Instead, all loans must be originated through a network of CalHFA-approved lenders. These lenders are trained on CalHFA’s program requirements and will guide buyers through loan selection, program eligibility, and submission of required documentation.

You can find an approved lender in your area through CalHFA’s official lender directory.

2. Complete Homebuyer Education

Before closing, all first-time homebuyers using CalHFA assistance must complete a homebuyer education course. The most commonly used option is eHome America’s eight-hour online course, which includes one-on-one counseling. In-person HUD-approved courses are also accepted. Lenders require completion certificates before funds can be disbursed.

3. Application and Documentation

Once a lender is selected, buyers must complete a formal loan application and provide documentation to verify eligibility. Key documents include:

• Recent pay stubs (typically covering 30 days)
• Last two years of tax returns and W-2s
• Bank statements for all accounts
• Employment verification from current employer
• Government-issued ID

Some programs may require additional forms or affidavits to confirm first-time homebuyer status or income levels.

Property Selection and Offer

When searching for a home, buyers using CalHFA programs should work closely with their real estate agent to ensure the property:

• Falls within CalHFA’s sales price limits
• Meets condition requirements for appraisal
• Can accommodate a longer closing timeline, which is often needed when assistance programs are involved

Buyers may want to include a brief explanation of the financing in their offer to reassure sellers, especially in competitive markets.

Closing Process

Once the home is under contract, the lender will finalize loan underwriting and coordinate with CalHFA to secure funds. Because these programs require additional approvals and documentation, the closing process may take slightly longer than a conventional loan. It’s important that your real estate agent knows you will be using these programs so that they can plan for it in their offer closing date.

To avoid delays, buyers should promptly respond to lender requests and complete final steps, such as homebuyer education and insurance selection.

Strategic Considerations for First-Time Homebuyers

California’s first-time homebuyer programs can be complicated but also a game changer, making it possible for you to buy a house. However, you need to have the right plan and support.

From choosing the right time to apply to understanding long-term obligations, being informed can help buyers get the most from these opportunities while avoiding costly missteps.

Timing Considerations

Some of California’s most popular assistance programs, especially the California Dream For All Shared Appreciation Loan, have limited application and funding windows. These programs may open only once or twice per year, and demand often far exceeds availability. Buyers interested in these options should:

• Follow CalHFA’s updates and announcements
• Get pre-approved in advance
• Work with an agent and lender who are familiar with time-sensitive applications

Applying early and being prepared with documentation increases the chances of securing assistance before funding runs out.

Program Combinations

Many CalHFA programs can be layered to provide greater financial benefits. For example, a buyer may combine a CalHFA FHA or Conventional Loan with the MyHome Assistance Program and the ZIP closing cost loan. In some cases, local or regional assistance may also be added if all participating lenders allow it.

It’s important to confirm compatibility and stacking limits with your lender early in the process. Do your own research and ask your lender about potential eligibility.

Long-Term Implications

Each program has different repayment requirements. Buyers should fully understand the repayment structure of any assistance program they use, such as:

• Deferred-payment Loans: require repayment only when the home is sold, refinanced, or no longer used as a primary residence.
• Shared Appreciation Koans: Require the original loan amount and a percentage of the home’s appreciation to be repaid later.

Repayment terms can affect future refinancing, resale proceeds, and long-term equity planning. Before committing, buyers should consider how long they plan to stay in the home and whether the assistance aligns with their financial goals.

Common Pitfalls to Avoid

Here are some of the most frequent mistakes first-time buyers make when using CalHFA programs:

1. Waiting too long to apply for limited-funding programs
2. Assuming all lenders or agents are familiar with CalHFA guidelines
3. Overlooking repayment terms for assistance loans
4. Choosing a property that exceeds CalHFA’s price or condition limits
5. Failing to complete homebuyer education in time

Working with experienced professionals can help prevent these missteps.

Questions to Ask Lenders

Before selecting a lender, buyers should first verify that they are a CalHFA-approved lender and ask:

• Which CalHFA programs do they offer, and can they be combined?
• How many CalHFA transactions have they closed recently?
• What are the current funding timelines for assistance programs?
• Can they help educate you on the repayment terms of any assistance you qualify for?

Asking the right questions early helps ensure the lender can efficiently and accurately guide the process.

Your Path to Homeownership in California

Homes in California are expensive, making buying a home a feel out of reach, but the right tools, guidance, and financial assistance can make it more achievable than many first-time buyers realize. With CalHFA’s mortgage and assistance programs, plus local support in cities across the state, there are real opportunities to lower upfront costs, secure favorable financing, and move confidently toward ownership.

Whether you’re seeking down payment help, closing cost support, or a more accessible loan option, California’s programs are designed to meet buyers where they are and help them move forward.

If you’re ready to take the next step, FastExpert can connect you with top-rated real estate agents and CalHFA-approved lenders who understand these programs inside and out. Having the right team behind you can make all the difference in navigating the process with clarity and confidence. Homeownership in California is possible, and FastExpert is here to help you get there.