Can You Buy a House With 10% Down in California?

Buying a house is always a major step. Especially for first-time buyers who often have limited funds and need to buy with a mortgage. Every state’s mortgage requirements change, so many first-time buyers in California ask: can you buy a house with 10% down in California?

Can You Buy a House With 10% Down in California?

Yes, you can buy a house with 10% down or less in California. According to the National Association of Realtors, first-time buyers often pay an average of 6% as a down payment for a house or condo. In certain cases, some homebuyers pay less or even nothing at all, however, properties bought like these are typically very lowly priced. 

Homebuyers can buy a house with 10% down or less using two different loan programs:  

  • Federal First-Time Home Buyer Programs
  • California First-Time Home Buyer Programs
A small two-story house in a residential area

Federal First-Time Home Buyer Programs

There are four major loan programs with each varying based on qualifications required and percentage of down payment. These are:

  • Federal Housing Administration (FHA) loans 
  • United States Department of Agriculture (USDA loans)
  • Veterans Affairs loans
  • Fannie Mae/ Freddie Mac Loans

Federal Housing Administration (FHA)  Loans  

The Federal Housing Administration (FHA) mortgage is a great option for first-time buyers. Requirements to qualify are relatively few and less stringent than other options. Down payment usually stays as low as 3.5% of the home value. Similarly, you might be required to pay up to 10% if your credit score is under 580. 

Closing costs are usually lower than some other loan options and this feature is particularly useful if you’re running a tight budget. An FHA loan can be paid off early without the penalty fees that you would incur on a conventional loan. 

One certain way to figure out the best option as a buyer is to hire the services of a CA Flat Fee realtor. Your agent can help demystify the loan process and use expert eyes to identify a top-notch property.

United States Department of Agriculture Loans 

A United States Department of Agriculture (USDA) usually requires zero down payment once requirements are met. These requirements are easy to fulfill and even individuals with relatively poor credit scores can be eligible. To qualify, there are two major requirements:

  • The house has to be situated in a semi-rural to a rural area that is federally recognized and approved. 
  • Household income should not exceed 115% of the median income of the area. If it exceeds this mark, you may be disqualified. 

Certain great properties fall into this category, and they are more easily discoverable if you work with a CA Flat Fee realtor who’s an expert on local properties. 

Veterans Affairs Loans 

A VA loan is only available for the following set of people:

  • Veterans and spouses
  • Current military members 
  • Other beneficiaries deemed fit by the Department of Veteran Affairs 

The VA in itself doesn’t do the lending. Rather, it collaborates with an external lender. There’s a VA fund fee (usually about 1.25% to 2.4% of the loan fee). A down payment is usually not required, however, parting with one reduces the VA fund fee. 

The lack of a down payment requirement makes it easy for qualified individuals who can make the monthly mortgage payments but are unable to pool funds together for a down payment. Closing costs are also lower with a VA loan, therefore, initial costs are minimal. 

Credit rating doesn’t have to be spectacular to get loan approval, however, the minimum score requirement for qualification is 620. 

Fannie Mae or Freddie Mac Loans

Fannie Mae and Freddie Mac are similar but differ based on their loan offerings. They are federal lenders backed by the government to ease the difficulties that follow buying a home, especially for first-time buyers. 

A house key placed on a calculator and surrounded by real estate brochures

Fannie Mae offers the HomeReady® mortgage which requires only a 3% down payment. This places the “loan to value” or percentage of the new home value that the loan covers at 97%. To qualify, there are two main requirements:

  • A FICO® credit score of 620 or above. 
  • Income in the threshold of the U.S. median or less. 

The downside is that you’ll need private mortgage insurance, but once you’ve paid off the loan to own up to 20% of your home’s equity, it can be removed. If any of these sound complicated, your CA Flat Fee realtor can shed more light. 

Freddie Mac offers the Home Possible® mortgage requiring only a 3% down payment as well. The Home Possible mortgage offers an option of a 15- to 30-year fixed-rate as well as 10/1, 7/1, 5/5, and 5/1 terms. Private mortgage insurance is required, but cancelable too. 

California First-Time Home Buyer Programs

There are two additional options available for California’s first-time homebuyers, namely: 

  • CalHFA & CalPLUS Conventional Loan Programs
  • CalHFA FHA & CalPLUS FHA Loan Programs

CalHFA & CalPLUS Conventional Loan Programs

CalHFA and CalPLUS loans are under the umbrella of California’s conventional loan program. They both have a 30-year fixed-rate mortgage feature with the CalPLUS being completely amortized. Both require private mortgage insurance. 

Eligibility requires that annual income stays within the county limits, ranging from $118,550 to $228,300. Additionally, pairing these mortgage options with the Extra Credit Teacher Home Purchase Program or CalHFA Zero Interest Program guarantees better benefits. 

CalPLUS applicants are eligible for the Zero Interest Program that supplies assistance with closing costs.  The Extra Credit Teacher Home Purchase Program is only available to teachers, school administrators, school district employees as well as other school staff members who also double as first-time homebuyers. The payment assistance usually ranges in the zone of $7,500 to $15,000. 

CalHFA FHA & CalPLUS FHA Loan Programs

CalPLUS FHA and CalHFA FHA loans are FHA-insured and come as 30-year fixed-rate mortgages. Removing the FHA backing, these loans are a replica of the conventional CalPLUS and CalHFA loans discussed above. There are two implications here:

  • The CalPLUS FHA is linked with the Zero Interest Program 
  • The CalHFA FHA loan can be paired with the Extra Credit Teacher Home Purchase Program

The CalPLUS FHA loan usually comes as a completely amortized loan as well. 


There are multiple options to buying a home for a 10% down payment or less in California. Your choice would typically depend on the loan you qualify for as well as your personal preference. Working with an experienced CA Flat Fee realtor can help determine what project is right for you.