California’s housing costs rank among the highest in the nation, with the median single-family home price surpassing $900,000 in early 2025 according to the California Association of Realtors. For first-time buyers, the California Housing Finance Agency (CalHFA) administers a suite of programs that reduce down payment burdens, lower credit barriers, and provide forgivable or deferred assistance. This guide covers every major program, eligibility threshold, and application step for 2026.
Key Takeaways
- CalHFA’s California Dream for All shared appreciation loan covers up to 20% of the purchase price, helping buyers avoid or minimize private mortgage insurance costs.
- The MyHome Assistance Program provides a deferred junior loan of up to 3.5% of the purchase price for FHA borrowers and up to 3% for conventional borrowers.
- Minimum credit score requirements start at 640 for CalHFA FHA loans and 680 for most CalHFA conventional loans.
- All CalHFA borrowers must complete an approved homebuyer education course before closing.
- The National Association of Realtors reported first-time buyers represented only 24% of all 2023 home purchases, the lowest share on record, making these programs more critical than ever. (NAR 2023 Profile of Home Buyers and Sellers)
CalHFA Programs Give First-Time Buyers Up to 20% Down Payment Help
California Housing Finance Agency programs are the primary state-level resource for first-time buyers, covering down payments, closing costs, and loan access. The Dream for All shared appreciation loan can cover up to 20% of the purchase price, dramatically reducing the cash buyers need at closing. NAR data shows first-time buyers made up just 24% of 2023 purchases, down from a 40-year average near 38%.
Source: California Housing Finance Agency (CalHFA), 2026. CalHFA administers multiple loan and assistance programs through a network of approved lenders. CalHFA does not lend directly to borrowers; buyers apply through certified lenders who originate loans under CalHFA guidelines. Program availability and limits are updated annually and vary by county. Verify current terms at calhfa.ca.gov before beginning your home search.
Core eligibility rules that apply across most CalHFA programs:
- Must not have owned a primary residence in the past three years (first-time buyer rule)
- Must occupy the purchased property as a primary residence
- Must complete an approved homebuyer education course before closing
- Income must fall within CalHFA county-level limits, which are updated annually
- Property purchase price must fall within CalHFA county-specific price limits
CalHFA Conventional Loan Requires Just 3% Down
The CalHFA Conventional loan is a 30-year fixed-rate mortgage structured under Fannie Mae HomeReady guidelines, requiring a minimum 3% down payment. To qualify, borrowers typically need a credit score of at least 680 and a debt-to-income ratio no higher than 45%. According to HUD, the national average first-time buyer down payment was around 8% in 2023, making CalHFA’s 3% threshold a significant advantage.
CalHFA conventional loans can be paired with the MyHome Assistance Program or Dream for All to cover most or all of the 3% requirement. Income must fall within CalHFA’s county-specific limits, and the property must serve as the buyer’s primary residence. Investment properties and vacation homes are ineligible for all CalHFA programs.
To understand how your debt-to-income ratio affects mortgage eligibility, read our guide to debt-to-income ratio for mortgages.
CalHFA FHA Loans Accept Credit Scores as Low as 640
The CalHFA FHA loan targets buyers with credit histories that do not qualify for conventional financing, accepting minimum scores of 640 versus the 680 typically required for CalHFA conventional products. FHA guidelines allow a 3.5% down payment for borrowers with scores at or above 580. Because CalHFA adds lender overlay requirements, the effective floor is 640 across its FHA product line.
FHA loans require both an upfront mortgage insurance premium of 1.75% of the loan amount (financed into the loan) and an annual MIP ranging from 0.15% to 0.75% depending on loan size and term. For buyers who cannot qualify for conventional financing, the FHA route paired with MyHome assistance often results in minimal out-of-pocket cash at closing.
For a detailed breakdown of FHA loan requirements, read our FHA loan guide for first-time buyers. Understanding your credit score’s impact on mortgage rates is equally important; see our guide on what credit score you need to buy a house. For more on this topic, see our california home buying financial requirements.
California Dream for All Covers Up to 20% With Shared Appreciation
The California Dream for All Shared Appreciation Loan provides a deferred junior loan covering up to 20% of the purchase price (maximum $150,000) with no monthly payments required. When the home sells, refinances, or transfers, the borrower repays the original amount plus a proportional share of appreciation. Per CalHFA, this is the largest single assistance amount available statewide for first-time buyers.
Source: CalHFA Dream for All Program, 2026. The shared appreciation repayment is proportional to the percentage originally borrowed. If the loan covers 20% of the purchase price, the borrower repays 20% of the home’s appreciation at time of sale. On a home purchased at $500,000 that later sells for $650,000, the buyer repays the $100,000 loan plus $30,000 in shared appreciation. Source: calhfa.ca.gov.
Because Dream for All funds are limited and have historically exhausted within days of each enrollment window, buyers should prepare documentation well in advance and work with a CalHFA-approved lender to submit immediately when funds become available.
MyHome Assistance Program Closes the Remaining Down Payment Gap
The MyHome Assistance Program provides a deferred junior loan of up to 3% of the purchase price for conventional loans and up to 3.5% for FHA and USDA loans. No payments are required until the home sells, refinances, or is fully paid off. Simple interest at 3.5% per year accrues on the outstanding balance until repayment.
MyHome can be layered with Dream for All and other assistance products, allowing buyers to cover the full down payment and a portion of closing costs without additional out-of-pocket cash. For buyers using an FHA loan at 3.5% down, a full MyHome award covers the entire required down payment.
For a comprehensive comparison of down payment assistance programs, see our down payment assistance programs guide and our complete FAQ for home buyers on down payments. Read more in our related guide: down payment assistance programs for fha loans.
Regional Programs Add Thousands More in High-Cost Counties
Beyond CalHFA statewide options, several California cities and counties maintain their own first-time buyer assistance. In Los Angeles, the LA County Development Authority operates down payment assistance programs for low- and moderate-income buyers. San Francisco’s Downpayment Assistance Loan Program (DALP) provides shared appreciation loans up to $500,000 for qualifying buyers in one of the nation’s most expensive markets.
San Diego’s Housing Commission administers assistance programs covering up to 25% of the purchase price through shared equity arrangements. Orange County’s Mortgage Assistance Program (MAP) offers deferred second loans for buyers in participating cities. These regional programs layer on top of CalHFA products, creating a stacked assistance approach that can cover the entire down payment and much of the closing costs.
If you are considering relocating from California to a lower-cost market, our first-time homebuyer assistance programs guide covers Nevada options that may significantly reduce your purchasing costs.
Income and Purchase Price Limits Vary by County
CalHFA sets county-specific income limits based on local Area Median Income (AMI) data. For most programs, borrower income must fall at or below 120% to 150% of AMI depending on program and county. In high-cost counties like Santa Clara and San Francisco, income limits can exceed $200,000 for households of four, while inland counties have considerably lower thresholds.
Source: U.S. Department of Housing and Urban Development (HUD), 2026. Area Median Income figures are updated annually and serve as the benchmark for state and federal housing assistance. Buyers can access current AMI data and program income limits at hud.gov. Income calculations include all household members 18 and older who will appear on the loan application, regardless of whether they receive housing benefit.
Purchase price limits similarly reflect local market conditions and are updated annually by CalHFA. Buyers should verify current county-specific limits directly with a CalHFA-approved lender before beginning their home search, as limits in some high-cost areas permit homes priced well above the state median.
The 5-Step Application Process for CalHFA Programs
Applying for CalHFA programs requires two layers of approval: the primary mortgage and the assistance loan, which extends timelines compared to conventional loans. CalHFA recommends planning for 45 to 60 days from accepted offer to close. Gathering documentation and completing the required homebuyer education course before finding a home significantly accelerates the process.
Step 1: Complete a homebuyer education course. All CalHFA borrowers must complete an approved homebuyer education program before closing. HUD-approved counseling agencies offer online courses typically costing between $50 and $125 and completable in 4 to 8 hours. Completing this step first ensures no delays late in the transaction.
Step 2: Get pre-approved with a CalHFA-approved lender. Not all lenders offer CalHFA products. Use CalHFA’s lender directory to identify certified lenders in your county and obtain a pre-approval letter that includes the specific assistance program you intend to use.
Step 3: Find a property within program price limits. Confirm the target property’s purchase price falls within your county’s CalHFA limit. The property must be a one-unit primary residence in acceptable condition per CalHFA guidelines.
Step 4: Submit your full loan application. Once you have a ratified purchase contract, your lender submits the complete file for CalHFA approval. Required documents include income verification, two years of tax returns, recent bank statements, and your homebuyer education certificate.
Step 5: Close and receive assistance funds. CalHFA assistance funds are disbursed directly at closing and appear on your settlement statement as a junior lien. No separate wire or deposit is needed from the buyer for the assistance amount.
For a detailed breakdown of what to expect at closing, including all fee categories, see our closing costs guide. If you have cash available after the down payment, our mortgage points guide explains when buying down your rate makes financial sense.
Frequently Asked Questions
What qualifies as a first-time homebuyer in California?
Under CalHFA’s definition, a first-time buyer is anyone who has not owned a primary residence in the past three years. Previous homeowners who have been renting for at least three years may qualify. Exceptions apply for veterans and buyers purchasing in federally designated targeted areas, where the three-year rule is waived.
Can I use CalHFA programs if I am self-employed?
Yes. Self-employed borrowers can use CalHFA programs, but lenders typically require two years of federal tax returns demonstrating consistent income. CalHFA uses taxable income as reported to the IRS rather than gross revenue, so high-deduction filers may qualify for less than expected. See IRS guidance on mortgage interest deductions for additional tax implications of homeownership.
How long does CalHFA approval take?
CalHFA recommends allowing 45 to 60 days from accepted offer to close when using its programs, compared to a typical 30-day conventional timeline. The additional time reflects CalHFA’s review of both the primary loan and the assistance loan. Beginning your education course and documentation collection before making an offer compresses the timeline considerably.
Are CalHFA programs available statewide?
CalHFA programs are available in all California counties through approved lenders. However, income limits, purchase price limits, and program availability vary by county and change annually. Some assistance programs, particularly Dream for All, are funded until exhausted and may not be accepting new applications at any given time. Confirm current availability with a CalHFA-approved lender before making commitments.
Can I combine multiple CalHFA assistance programs?
Yes. CalHFA allows layering of assistance programs in approved configurations. Dream for All can be combined with a CalHFA FHA or conventional primary loan. MyHome can stack with certain other programs. Total assistance cannot exceed program caps or create a negative equity position. Your CalHFA-approved lender can confirm which combinations are currently eligible.
