Down Payment Help for First-Time Home Buyers in California
What California Programs Actually Offer for Down Payments
California has several programs that put money toward your down payment or closing costs, but they work differently depending on your income, the county you're buying in, and the lender you choose. Some programs give you a grant (money you don't repay), others give you a second loan that sits behind your primary mortgage, and some combine both. The money doesn't come to you directly—it goes to the title company or escrow at closing. You need to know which programs your lender will accept, because not all lenders work with all programs.
The largest programs are run by the California Housing Finance Agency (CalHFA), which is a state agency that works through banks and mortgage companies. CalHFA's down payment assistance comes in two main forms: grants up to 3 or 5 percent of the purchase price (depending on the program), and second mortgages with no monthly payment until you sell or refinance. There are also county and city programs—some generous, some limited—and programs run by nonprofits that partner with specific lenders. The catch is that many of these programs have income caps, purchase price limits, and waiting lists. Some are currently closed because they ran out of funding.
Key Takeaways
- CalHFA programs offer grants up to 5 percent of purchase price plus second mortgages, but your lender must be approved to use them and your income must fall below the program's cap.
- County and city programs vary widely—some offer substantial grants, others offer small amounts or have long waiting lists—so you need to check what's available where you're buying.
- Your lender decides which programs they'll work with, so ask them upfront which down payment assistance they accept before you start shopping for a home.
- Most programs require you to take a homebuyer education course, which usually takes 8 to 10 hours and can be done online.
- Income limits, purchase price caps, and property type restrictions (some programs exclude condos or investment properties) vary by program and change yearly.
CalHFA Programs: Grants and Second Mortgages
CalHFA runs the largest down payment assistance programs in the state. The main program is called the CalHFA Conventional 97 loan, which pairs a 97 percent loan-to-value mortgage with down payment assistance. You put down 3 percent of your own money, and CalHFA covers part of that through a grant or second mortgage. The second mortgage has no monthly payment—you repay it only when you sell the home, refinance, or pay off the first mortgage. This means your monthly housing payment stays lower than it would with a traditional 10 or 20 percent down payment.
CalHFA also offers the CalHFA Jumbo 97 program for homes above the conventional loan limit (which changes yearly but is typically around $766,000 in most of California). The structure is the same: you put down 3 percent, and CalHFA provides assistance. There's also the CalHFA FHA 97 program, which uses an FHA-insured loan instead of a conventional one—this can be easier to may have access to for if your credit score is lower or your debt-to-income ratio is tight.
To use any CalHFA program, your lender must be approved by CalHFA, your income must be below the program's cap (which varies by county and family size), and you must complete a homebuyer education course. The purchase price limit also varies by county. You can check CalHFA's website to see current income limits, purchase price caps, and which lenders are approved in your area.
County and City Programs: Highly Variable Funding and Rules
Beyond CalHFA, most California counties and many cities run their own down payment assistance programs. These are often more generous than state programs but also more limited in scope. For example, some counties offer grants of 5 to 10 percent of the purchase price with no second mortgage required, while others offer smaller amounts or have waiting lists that are years long. Some programs are open only to buyers in specific neighborhoods or with specific income levels.
A few examples: Santa Clara County has offered down payment grants up to 5 percent through its Housing Trust Fund, but the program has had periods where it was closed to new applicants. San Francisco has multiple programs, some of which prioritize teachers, healthcare workers, or other essential workers. Los Angeles County programs vary by city within the county. The problem is that these programs change—funding runs out, programs reopen, income limits shift, and may be able to access rules change. You cannot rely on a program existing or having the same rules next year.
To find county and city programs, start with your county assessor's office or your city's housing department website. You can also call your local housing authority or search "down payment assistance [your county name]" to see what's currently available. Many nonprofits also maintain lists of local programs. Ask your lender which county and city programs they work with, because some lenders have partnerships with specific programs and others don't.
Nonprofit and Lender-Specific Programs
Some nonprofits and mortgage lenders offer their own down payment assistance, often in partnership with CalHFA or local housing authorities. These programs sometimes have less stringent income requirements or lower credit score minimums than government programs. They may also offer down payment assistance as a grant rather than a second mortgage, which is more valuable to you.
Examples include programs run by organizations like NeighborWorks, Habitat for Humanity, and various community development financial institutions (CDFIs). Some credit unions also offer down payment assistance to their members. The terms, income limits, and availability vary widely. Your lender can tell you if they have access to nonprofit programs, or you can search "nonprofit down payment assistance California" to find organizations in your area.
Income Limits, Purchase Price Caps, and Other Restrictions
Every down payment assistance program has an income limit—the maximum household income you can earn and still be may be able to access. These limits vary by county and family size and are usually set at 80 to 120 percent of the area median income. In expensive counties like San Francisco or San Mateo, the median income is high, so the income limit is higher. In less expensive counties, the limit is lower. Income limits also change yearly, usually in the spring.
Programs also have purchase price caps—the maximum price of the home you can buy and still use the program. These caps vary by county and are usually set to keep the program focused on homes that are affordable to moderate-income buyers. If you're buying a home above the cap, you won't be able to use that program. Some programs also exclude certain property types: condos, investment properties, or homes in rural areas.
Most programs require you to be a first-time homebuyer, though the definition varies. Some define it as someone who has not owned a home in the past three years. Others are stricter. Some programs also require you to live in the home as your primary residence for a set period (usually 5 to 7 years) or repay the assistance if you sell or move.
The Homebuyer Education Course Requirement
Nearly all down payment assistance programs require you to complete a homebuyer education course before closing. This course covers topics like budgeting, credit, the mortgage process, home maintenance, and property taxes. It usually takes 8 to 10 hours and can be done online, in person, or as a combination. Some courses are offered for free by nonprofits or housing authorities; others charge a fee (typically $50 to $200).
Your lender can tell you which courses they accept, or you can search for HUD-approved homebuyer counseling in your area. Many nonprofits offer free courses, especially if you're buying in a specific county or neighborhood. The course certificate is usually valid for one year, so you need to complete it before you close on your home. Some programs allow you to take the course before you're pre-approved; others require you to take it after pre-approval but before closing.
How to Start: Talking to Your Lender First
The first step is to get pre-approved for a mortgage and ask your lender which down payment assistance programs they work with. This matters because not all lenders accept all programs. A lender who works with CalHFA may not work with your county's program, or vice versa. Some lenders specialize in down payment assistance and have partnerships with multiple programs; others offer only CalHFA.
Once you know which programs your lender accepts, you can check whether you meet the income, purchase price, and other requirements. Your lender can usually tell you this quickly. If you meet the requirements, you can move forward with the program. If you don't, your lender may suggest a different program or a different lender who works with programs you do may have access to for.
The application process usually happens after you've made an offer on a home and your offer has been accepted. You'll submit income documents, tax returns, and proof of employment to the program, and the program will verify your may be able to access. This usually takes two to four weeks. Once you're approved, the program's funds are set aside and will be disbursed at closing.
Frequently Asked Questions
What if I don't have 3 percent for a down payment?
Some CalHFA programs and nonprofit programs offer down payment assistance that covers the full 3 percent, so you may not need to put any of your own money down. However, you'll still need to cover closing costs, which typically run 2 to 5 percent of the purchase price. Some programs also offer closing cost assistance. Ask your lender whether they have programs that cover both down payment and closing costs.
Do I have to repay down payment assistance?
It depends on the program. Grants do not need to be repaid. Second mortgages must be repaid when you sell the home, refinance, or pay off your first mortgage. Some programs offer a combination: a grant for part of the assistance and a second mortgage for the rest. Ask your lender which type of assistance each program offers.
Can I use down payment assistance if I have bad credit?
Most CalHFA programs require a credit score of at least 620, though some programs accept scores as low as 580. Nonprofit programs sometimes have lower credit score requirements. If your credit score is below 620, ask your lender whether they have access to programs with lower minimums or whether you should work on improving your score before applying.
What if the program I want is closed?
Many programs run out of funding and close to new applicants, then reopen when new funding becomes available. You can ask your lender to put you on a waiting list or check back in a few months. In the meantime, ask your lender about other programs you might may have access to for. Some programs always have funding available; others are seasonal or sporadic.
Do I have to buy in California to use these programs?
Yes, all of these programs are for homes in California only. If you're buying in another state, you'll need to look for down payment assistance programs in that state.