Quick Answer
No, you don't need 20% down. FHA loans require 3.5%, conventional starts at 3%, and VA/USDA offer 0% down. On a $500,000 California home, that's the difference between $100,000 and $17,500. California programs like CalHFA can cover your entire down payment with a silent second mortgage.
Do You Need 20% Down to Buy a House?
If you think you need 20% down to buy a house, you've been lied to.
That number comes from a time before modern loan programs existed. It's the single biggest myth keeping would-be homeowners stuck renting for years longer than they need to.
Here's what the actual down payment minimums look like in 2026.
The Real Down Payment Minimums
| Loan Type | Down Payment | On a $500K Home |
|---|---|---|
| FHA | 3.5% | $17,500 |
| Conventional | 3% | $15,000 |
| VA | 0% | $0 |
| USDA | 0% | $0 |
That's the difference between saving $100,000 and saving $17,500. For most California buyers, the FHA or conventional route cuts years off the timeline to homeownership.
Zero Down Options That Actually Exist
VA Loans are available to veterans, active duty service members, and eligible surviving spouses. No down payment required, no private mortgage insurance (PMI), and competitive interest rates. If you served, this is likely your best option.
USDA Loans cover homes in eligible rural and suburban areas. More California zip codes qualify than you'd expect. Zero down, low mortgage insurance, and below-market rates.
California Programs That Cover Your Down Payment
Even if you're going FHA or conventional, California has programs designed to cover that 3-3.5% for you.
CalHFA's My Home Assistance Program gives you a silent second mortgage to cover the down payment. Here's what "silent" means: you don't make monthly payments on it. You don't pay it back until you sell or refinance. It's essentially free money to get you into the house now.
Other California programs worth looking into:
- Dream For All -- shared appreciation loan covering down payment and closing costs
- County-specific DPA programs -- many California counties offer grants or forgivable loans
- Employer-assisted housing programs -- some California employers offer down payment benefits
The Part Nobody Warns You About: Closing Costs
Here's what nobody tells you. Even with a low or zero down payment, you still need cash for closing costs.
Closing costs typically run 2-5% of the purchase price on top of your down payment. On a $500,000 California home, plan for $10,000 to $25,000.
What's included in closing costs:
- Title fees -- insurance and search fees to verify ownership
- Lender fees -- origination charges, appraisal, underwriting
- Prepaid taxes -- property taxes collected in advance
- Insurance escrow deposits -- homeowner's insurance reserves
- Recording fees -- county charges to record the deed
The good news: closing costs are negotiable. Seller concessions can cover up to 6% of the purchase price on FHA loans, and many assistance programs help with closing costs too.
The Bottom Line
You don't need a hundred grand to buy a house. Here's your real checklist:
- 3.5% down (or less with VA/USDA/CalHFA)
- Programs that cover even that (CalHFA My Home, Dream For All, county DPA)
- A plan for closing costs ($10K-$25K on a $500K home, negotiable via seller concessions)
That's it. That's the real number.
Get Your Free California Buyer Checklist
I put together a free checklist that breaks down every cost, every program, and every step for California first-time buyers. It covers down payment options, assistance programs, credit requirements, and closing cost breakdowns specific to California.
Download the free checklist here or book a free call to find out exactly what you qualify for.
Aditya Choksi | Loan Officer | NMLS #2055084 | 21st Century Lending | NMLS #241835
This content is educational and does not constitute individualized financial advice. Mortgage qualification depends on your specific financial situation. Program availability, terms, and eligibility requirements may vary. Contact a licensed loan officer for current program details. Equal Housing Lender.