California Down Payment Assistance Programs 2026

Introduction: You Don't Need 20% Down (Or Even 10%)

The biggest myth in home buying:

"You need 20% down to buy a house."

That's not true—especially in California, where multiple down payment assistance programs exist to help first-time buyers.

Here's reality:

• 3.5% down: FHA loans require just 3.5% down
• 3% down: Conventional loans with first-time buyer programs
• 0% down: VA loans (veterans), USDA loans (rural/suburban areas)
• Plus: Down payment assistance grants can cover most or all of your down payment

Example (Inland Empire):

Let's say you're buying a $450,000 home in Riverside County.

Without assistance:

• 20% down = $90,000 (most people don't have this)
• 3.5% down (FHA) = $15,750 (still tough to save)

With down payment assistance:

• FHA down payment: $15,750
• CalHFA grant: $10,000
• Your cash needed: $5,750

That's doable.

If you're a first-time buyer in California and you think you can't afford a home, this guide breaks down every major down payment assistance program available—and how to actually use them.

What is down payment assistance?

Down payment assistance provides grants or zero-interest deferred loans to cover part or all of your down payment and closing costs. Most California programs are deferred-payment loans repaid when you sell or refinance, not monthly payments required.

Down payment assistance (DPA) is financial help (grants or loans) to cover part or all of your down payment and closing costs.

Types of DPA:

1. Grants: Free money (no repayment required)
2. Deferred-payment loans: You repay when you sell, refinance, or pay off the mortgage (0% interest, no monthly payment)
3. Forgivable loans: Forgiven after you live in the home for X years
4. Low-interest second mortgages: You make monthly payments (rare)

Most California DPA programs are deferred-payment loans. You don't pay anything monthly—you repay the loan when you sell or refinance.

What are California's statewide down payment assistance programs?

California offers CalHFA MyHome Assistance providing 3.5% or up to $10,000 deferred-payment grants, and CalHFA Dream For All providing 20% down payment loans with shared appreciation repayment when you sell.

1. CalHFA MyHome Assistance Program

What it is: A 3.5% down payment assistance grant (up to $10,000, whichever is less) for first-time homebuyers.

How it works:

• You get a deferred-payment junior loan (second mortgage) at 0% interest
• No monthly payments required
• You repay the full amount when you:
  • Sell the property
  • Refinance
  • Pay off your first mortgage

Eligibility:

• First-time homebuyer (no home ownership in last 3 years)
• Income limits: Varies by county (typically 80-120% of Area Median Income)
• Credit score: 660+ (FHA/VA/USDA) or 680+ (conventional)
• Homebuyer education course: Required (6-8 hours, online or in-person)
• Property: Must be your primary residence

Example:

• Home price: $500,000
• Down payment needed (3.5% FHA): $17,500
• CalHFA MyHome grant: $10,000
• Your cash needed: $7,500

How to apply:

• Work with a CalHFA-approved lender
• Complete homebuyer education course
• Apply for both your mortgage and DPA at the same time

2. CalHFA Dream For All Shared Appreciation Loan

What it is: A 20% down payment loan for first-time homebuyers and first-generation homebuyers.

How it works:

• CalHFA provides 20% of the purchase price as a down payment loan
• 0% interest, no monthly payments (silent second mortgage)
• You repay the loan when you:
  • Sell the property
  • Refinance
  • Transfer title
• Plus: CalHFA gets 20% of any appreciation when you sell

Eligibility:

• First-time homebuyer OR first-generation homebuyer (parents never owned a home)
• Income limits: Up to 150% of Area Median Income (higher than most programs)
• Credit score: 680+ minimum
• Property: Must be your primary residence
• Homebuyer education course: Required

Example:

• Home price: $600,000
• Down payment from CalHFA: $120,000 (20%)
• Your down payment: $0-$30,000 (depending on loan type)
• You sell 10 years later for $800,000 (33% appreciation)
• You repay: $120,000 loan + 20% of $200,000 appreciation = $160,000

Best for: First-generation homebuyers or buyers in expensive markets who need significant down payment help.

Downside: You share appreciation with CalHFA. If your home appreciates significantly, you'll owe more than the original loan amount.

What county and city programs are available in California?

Major California counties offer $5,000 to $125,000 in down payment assistance through housing authorities. LA County provides up to $125,000, Orange County up to $100,000, and most programs offer deferred-payment or forgivable loans.

Many California counties and cities offer their own down payment assistance programs. Here are some major ones:

Los Angeles County

LA County Development Authority (LACDA)

• Assistance: Up to $125,000 (silent second loan)
• Repayment: Deferred until sale, refinance, or loan payoff
• Eligibility: First-time buyers, income limits apply

Orange County

Orange County Housing Authority

• Assistance: Up to $100,000 (deferred-payment loan)
• Repayment: When you sell or refinance
• Eligibility: First-time buyers, income limits

Riverside County

Riverside County Housing Authority

• Assistance: Varies by program (typically $5,000-$15,000)
• Repayment: Deferred or forgivable
• Eligibility: First-time buyers, income limits

San Bernardino County

San Bernardino County Housing Authority

• Assistance: Up to $20,000 (down payment + closing costs)
• Repayment: Forgivable after 5 years
• Eligibility: First-time buyers, income limits

San Diego County

San Diego Housing Commission (SDHC)

• Assistance: Up to $30,000 (deferred-payment loan)
• Repayment: When you sell, refinance, or pay off mortgage
• Eligibility: First-time buyers, income limits

How to find your local program:

• Search "[Your County] down payment assistance"
• Contact your county housing authority
• Ask your lender (they often know local programs)

Can I combine down payment assistance with different loan types?

Yes. DPA works with FHA loans requiring 3.5% down, conventional loans requiring 3-5% down, VA loans requiring zero down but needing closing costs covered, and USDA loans requiring zero down for eligible rural areas.

Down payment assistance can be combined with various loan types:

FHA Loans + DPA (Most Common)

How it works:

• FHA requires 3.5% down
• DPA covers part or all of the 3.5%
• You bring the rest (or nothing if DPA covers it all)

Example:

• Home price: $450,000
• FHA down payment (3.5%): $15,750
• CalHFA MyHome grant: $10,000
• Your cash needed: $5,750

Best for: First-time buyers with lower credit scores (FHA allows 580-640 credit scores).

Conventional Loans + DPA

How it works:

• Conventional loans require 3-5% down for first-time buyers
• DPA covers part of the down payment
• You bring the rest

Example:

• Home price: $500,000
• Conventional down payment (3%): $15,000
• Local county DPA grant: $10,000
• Your cash needed: $5,000

Best for: First-time buyers with good credit (680+) who want to avoid FHA mortgage insurance.

VA Loans + DPA (Veterans)

How it works:

• VA loans require 0% down (no down payment)
• DPA can cover closing costs (typically 2-3% of purchase price)
• You bring little to no cash

Example:

• Home price: $550,000
• Down payment: $0 (VA loan)
• Closing costs: $11,000 (2%)
• CalHFA MyHome grant: $10,000
• Your cash needed: $1,000

Best for: Veterans who want to minimize cash out-of-pocket.

USDA Loans + DPA (Rural/Suburban)

How it works:

• USDA loans require 0% down (no down payment)
• DPA can cover closing costs
• You bring little to no cash

Eligible areas: Parts of Riverside, San Bernardino, Kern, Ventura counties (check USDA eligibility map)

Example:

• Home price: $400,000
• Down payment: $0 (USDA loan)
• Closing costs: $8,000
• Local DPA grant: $8,000
• Your cash needed: $0

Best for: Buyers in suburban/rural areas who qualify for USDA loans.

How do I qualify for down payment assistance in California?

Most programs require first-time homebuyer status (no ownership in 3 years), income limits of 80-120% Area Median Income, minimum 640-680 credit score, completion of homebuyer education course, and using property as primary residence.

Most DPA programs have similar requirements:

1. First-Time Homebuyer Status

Definition: You haven't owned a home in the last 3 years.

Exceptions:

• First-generation homebuyers (your parents never owned a home) may qualify for some programs even if you're not a first-time buyer
• Displaced homemakers (divorced/separated and haven't owned a home in 3 years)

2. Income Limits

Most programs have income limits based on Area Median Income (AMI) for your county.

Typical limits:

• 80% AMI: Lower-income programs
• 100% AMI: Moderate-income programs
• 120-150% AMI: Higher-income programs (CalHFA Dream For All)

Example (Los Angeles County, 2026):

• Area Median Income (AMI): ~$90,000 (family of 4)
• 80% AMI limit: $72,000
• 120% AMI limit: $108,000

Your income includes:

• Wages, salary, bonuses
• Self-employment income
• Rental income
• Alimony, child support
• Social Security, disability

3. Credit Score

Minimum credit scores:

• 640: FHA loans with DPA
• 660: CalHFA MyHome with FHA
• 680: CalHFA MyHome with conventional, CalHFA Dream For All
• 700+: Best rates and terms

How to improve your credit score:

• Pay down credit card balances (aim for less than 30% utilization)
• Pay all bills on time for 6+ months
• Don't open new credit accounts
• Dispute errors on your credit report

4. Homebuyer Education Course

Required by most DPA programs.

What it covers:

• Budgeting and credit management
• Home buying process
• Mortgage options
• Avoiding foreclosure

Where to take it:

• HUD-approved agencies (online or in-person)
• 6-8 hours (can be completed in one day)
• Cost: $75-$150 (some programs waive the fee)

Completion: You receive a certificate to submit with your DPA application.

5. Property Requirements

Must be:

• Your primary residence (no investment properties or second homes)
• Located in an eligible area (most programs are statewide, but some are county-specific)
• Single-family home, condo, or 1-4 unit property (if you live in one unit)

Must NOT be:

• Investment property
• Vacation home
• Manufactured home (some programs allow, others don't)

Step-by-Step: How to Apply for Down Payment Assistance

Step 1: Check Your Credit Score

Before applying, know where you stand.

• 680+: You qualify for most programs
• 640-679: You may qualify for FHA + DPA
• Below 640: Work on improving your credit before applying

Step 2: Research Programs

Identify programs you qualify for:

• Statewide: CalHFA MyHome, CalHFA Dream For All
• Local: Your county/city housing authority programs
• Employer-based: Ask your HR department

Step 3: Complete Homebuyer Education

Take a HUD-approved homebuyer education course (required for most programs).

Where to find courses:

• Search "HUD-approved homebuyer education [your city]"
• Many are available online
• Cost: $75-$150

Step 4: Get Pre-Approved with a DPA-Approved Lender

Important: Not all lenders offer down payment assistance programs.

How to find a DPA lender:

• CalHFA website lists approved lenders
• Search "down payment assistance lenders [your city]"
• Ask potential lenders: "Do you work with CalHFA or other DPA programs?"

What you'll need:

• Pay stubs (last 2 months)
• W-2s (last 2 years)
• Bank statements (last 2 months)
• Tax returns (last 2 years if self-employed)
• Homebuyer education certificate

Step 5: Find a Home

Work with a real estate agent who understands DPA programs.

Tell your agent:

• "I'm using down payment assistance"
• "I'm pre-approved with [lender name]"
• "My budget is [max purchase price]"

What to look for:

• Properties within your price range
• Properties in good condition (some DPA programs don't allow fixer-uppers)
• Areas you want to live (remember: this is your primary residence for at least a few years)

Step 6: Submit Your Offer

When you find a home:

• Your agent submits an offer
• Include proof of pre-approval with DPA

Timeline:

• Sellers may take 24-72 hours to respond
• If accepted, you move to escrow

Step 7: Close on Your Home

Timeline: 30-45 days from offer acceptance to closing

What happens:

• Lender orders appraisal
• Home inspection (optional but recommended)
• Lender finalizes your mortgage and DPA
• You sign closing documents
• You get the keys

Your costs at closing:

• Down payment (minus DPA grant/loan)
• Closing costs (minus any DPA for closing costs)
• Typically $3,000-$10,000 out-of-pocket (with DPA)

Common Mistakes to Avoid

Mistake 1: Waiting Too Long to Apply

DPA programs have limited funding. Some programs run out of money mid-year.

Solution: Apply early in the year (January-March) when funding is replenished.

Mistake 2: Not Completing Homebuyer Education Early

Many buyers wait until they're in escrow to take the course. By then, it may delay your closing.

Solution: Take the course before house hunting (it's valid for 1-2 years).

Mistake 3: Choosing the Wrong Lender

Not all lenders work with DPA programs. If you get pre-approved with a lender who doesn't offer DPA, you'll have to start over.

Solution: Find a DPA-approved lender first, then get pre-approved.

Mistake 4: Forgetting About Closing Costs

Down payment assistance covers your down payment—but you still need closing costs (2-3% of purchase price).

Solution: Some DPA programs cover closing costs too. Ask your lender.

Mistake 5: Not Checking Income Limits

DPA programs have income limits. If you make too much, you won't qualify.

Solution: Check income limits for your county before applying.

Final Thoughts

If you're a first-time homebuyer in California, down payment assistance can make home ownership possible.

You don't need 20% down. You don't even need 10% down.

With the right program, you can buy a home with:

• $5,000-$10,000 out-of-pocket (FHA + CalHFA MyHome)
• $1,000-$3,000 (VA + DPA for closing costs)
• $0 (USDA + DPA for closing costs)

Next steps:

1. Check your credit score
2. Research DPA programs in your county
3. Take a homebuyer education course
4. Get pre-approved with a DPA-approved lender
5. Start house hunting

Questions about down payment assistance or first-time homebuyer programs? Contact us—we specialize in helping first-time buyers navigate DPA programs and purchase homes with little money down.

Frequently Asked Questions

About the Author:
Aditya Choksi is a licensed Mortgage Loan Officer and Realtor specializing in VA loans, DSCR loans, FHA loans, and down payment assistance programs. NMLS #2055084, DRE #02154132. Licensed in AZ, CA, CO, GA, NM, WA.