Searching for first-time homebuyer programs in California can be overwhelming, because there are state, county and lender programs, and funds and rules change often. This guide explains the main categories and the questions to ask before you rely on one.
The main types of help
- State programs (CalHFA). The California Housing Finance Agency offers first-mortgage loans and, at times, down payment or closing cost assistance. Availability and funding vary by round, so check its current offerings.
- Mortgage Credit Certificates (MCC). An MCC can turn part of your mortgage interest into a federal tax credit, which may help your budget. Local agencies administer them.
- FHA loans. Federally insured loans with down payments as low as 3.5% for qualified borrowers and more flexible credit standards.
- Low-down-payment conventional loans. Programs such as Fannie Mae HomeReady and Freddie Mac Home Possible allow as little as 3% down for eligible buyers.
- VA and USDA loans. Zero-down options exist for eligible veterans and rural properties, though USDA areas are limited and mostly outside the Westside.
- City and county programs. Los Angeles and other local agencies sometimes offer assistance, usually with income, price or lottery limits.
How to qualify
Rules differ, but common requirements include:
- First-time buyer status (often defined as not having owned a home in the last three years)
- Income limits tied to the area’s median
- A minimum credit score
- Homebuyer education course
- Occupying the home as your primary residence
- Purchase price limits
Questions to ask before you count on any program
- Is funding currently available, or is there a waitlist?
- Is the assistance a grant or a loan, and is it forgivable or repaid when you sell or refinance?
- Does it affect my interest rate or require a specific lender?
- Are there resale or shared-appreciation terms?
- How long does approval take, and will it fit my contract timeline?
Do not skip the basics
A program can reduce your upfront cost, but you still need a payment you can sustain. Review our guide on how much cash you need to buy in Los Angeles and compare total monthly cost across programs, not just the down payment.
Where to start
Talk with a loan officer who knows which programs your property and income fit. Terranova’s in-house team can compare several options side by side. See our loan options.
Frequently asked questions
Do I need to be a first-time buyer to use these programs?
Many programs require it, usually meaning you have not owned a home recently. Some have exceptions.
Can I combine programs?
Sometimes. For example, an FHA loan can be paired with certain down payment assistance. Ask your lender.
Is the down payment assistance free money?
Not always. Some are grants, others are loans that must be repaid or are forgiven over time. Read the terms.
Not sure which program fits? We will compare your options and tell you what you may qualify for.
This article is general information, not a loan commitment, legal or tax advice. Programs, rates and rules change, so confirm current details with a licensed professional before you decide.
Written by the Terranova Real Estate Group team · DRE 01785581 · NMLS 1091484 · Meet Griselda Espinoza