By Mike Basti, President and Mortgage Broker · NMLS #322904In California, an FHA loan requires 3.5% down with a credit score of 580 or higher, or 10% down for scores from 500–579. On a $500,000 home that's $17,500 at 3.5%. FHA allows the down payment to be a gift from family, and you can pair FHA with programs like CalHFA Dream For All to cover it.
How much down payment for an FHA loan?
- 3.5% down with a credit score of 580+ — the standard FHA minimum.
- 10% down for scores between 500 and 579.
Example: a $500,000 California home needs about $17,500 down at 3.5%. FHA also has its own county loan limits (separate from conforming limits), which are higher in high-cost California counties.
FHA loan requirements in California
- Credit and down payment: 580+ score with 3.5% down, or 500–579 with 10% down.
- Primary residence: FHA is for homes you will live in, including 2–4 unit properties where you occupy one unit.
- Loan limit: the loan must fit your county’s FHA limit, which is separate from (and usually lower than) the conforming limit.
- Mortgage insurance: a 1.75% upfront premium plus an annual premium, about 0.55% for most borrowers putting 3.5% down.
- Income and debts: steady, documented income; the lender reviews your debt-to-income ratio.
- Property: the home must pass an FHA appraisal.
How to apply for an FHA loan in California
- Check your credit so you know whether you are in the 3.5% or 10% down tier.
- Get pre-approved with a lender or broker that offers FHA — a broker can compare several FHA lenders at once. See our pre-approval guide.
- Line up the down payment from savings, a documented gift, or assistance such as CalHFA.
- Make an offer and lock your rate, asking for seller credits toward closing costs if needed.
- Complete the appraisal and underwriting, then close.
For the full program, see FHA loans in California and how much FHA loan you can qualify for.
Where the down payment can come from
FHA is flexible on down-payment source. You can use gift funds from a family member (with a gift letter), and you can combine FHA with California down payment assistance. Many first-generation buyers pair FHA-style financing with CalHFA Dream For All or other assistance programs to reduce cash needed at closing.
The trade-off: mortgage insurance
FHA loans carry mortgage insurance premiums (an upfront premium plus an annual premium built into your payment). That's the cost of the low down payment. For buyers with 5% or more down and stronger credit, we compare FHA against conventional to see which is actually cheaper over your expected time in the home.
Is FHA right for you?
FHA shines for lower down payments and more forgiving credit. Conventional can win when you have 5%+ down and good credit. We run both side by side — try the FHA loan calculator or call us.
FHA down payment examples
| Home price | 3.5% down (580+ score) | 10% down (500–579 score) |
|---|---|---|
| $500,000 | $17,500 | $50,000 |
| $700,000 | $24,500 | $70,000 |
| $900,000 | $31,500 | $90,000 |
The loan amount must stay within your county’s FHA limit. See California loan limits by county.
Closing costs are separate
The down payment does not cover closing costs, which typically add about 2–4% of the price. FHA allows the seller to pay up to 6% of the price toward your closing costs, which can cut the cash you need at closing.
Mortgage insurance in dollars
FHA charges an upfront premium of 1.75% of the loan, usually added to the loan, plus an annual premium paid monthly, about 0.55% a year for most borrowers putting 3.5% down. On a $675,000 loan that is roughly $310 a month. With less than 10% down, the annual premium lasts for the life of the loan, which is why many buyers refinance later. Call 949-379-5320 to compare FHA with a 3%-down conventional loan.
Frequently asked questions
What is the minimum FHA down payment in California?
3.5% of the purchase price with a credit score of 580 or higher. Buyers with scores between 500 and 579 need 10% down.
Can the FHA down payment be a gift?
Yes. FHA allows 100% of the down payment to come from an acceptable gift, typically from a family member, documented with a gift letter.
Can I use down payment assistance with an FHA loan?
Often, yes. California buyers frequently combine low-down-payment financing with assistance programs like CalHFA to cover the down payment and some closing costs. We'll confirm what you qualify for.
Are FHA loan limits the same as conforming limits?
No. FHA sets its own county loan limits, which are usually lower than the Fannie/Freddie conforming limits. Ask us for the FHA limit in your county.
Can the seller pay my FHA closing costs?
Yes. FHA allows seller concessions of up to 6 percent of the sale price toward closing costs and prepaid items, but not toward the down payment.
Is FHA mortgage insurance permanent?
With less than 10 percent down, the annual premium lasts for the life of the loan. With 10 percent or more down, it ends after 11 years. Many borrowers later refinance into a conventional loan to remove it.
Who qualifies for an FHA loan in California?
Buyers with a credit score of 580 or higher can put 3.5% down, and scores from 500 to 579 need 10% down. You must live in the home as your primary residence, show steady income, and keep the loan within your county’s FHA limit.
Can I buy a duplex or fourplex with an FHA loan in California?
Yes. FHA finances one- to four-unit properties as long as you live in one of the units. FHA loan limits are higher for multi-unit homes, and rent from the other units can help you qualify.
How do I apply for an FHA loan in California?
Check your credit, get pre-approved with a lender or broker that offers FHA, document your down payment or gift, then make an offer, lock your rate and complete the FHA appraisal and underwriting before closing.