Loan Programs · 7 min read
FHA Loans in California (2027): Requirements, Down Payment & Limits
An FHA loan lets California buyers purchase with as little as 3.5% down and a 580 credit score (or 10% down with a 500–579 score). For loans closing in 2026, California's FHA loan limits run from a floor of $541,287 in lower-cost counties up to a $1,249,125 ceiling in high-cost counties like Los Angeles and Orange. FHA's 2026 limits run from $541,287 to $1,249,125 by county. HUD publishes 2027 limits in late 2026; early estimates put them near $552,500 to $1,275,000. FHA loans require mortgage insurance and must be used for a primary residence.
What are the FHA requirements in California for 2027?
| Down payment | 3.5% with 580+ FICO; 10% with 500–579 |
| Credit score | 580+ for 3.5% down |
| DTI | Generally up to ~43–50% with compensating factors |
| Occupancy | Primary residence only |
| Mortgage insurance | 1.75% upfront (UFMIP) + annual MIP |
See the full FHA loan program.
What are the FHA loan limits in California for 2026?
FHA limits are set county by county. For loans closing in 2026 they range from the national floor of $541,287 in lower-cost counties to the ceiling of $1,249,125 in high-cost counties, including Los Angeles, Orange, San Francisco, San Mateo, and Santa Clara. San Diego ($1,104,000) and several other metros fall in between. FHA's 2026 limits run from $541,287 to $1,249,125 by county. HUD publishes 2027 limits in late 2026; early estimates put them near $552,500 to $1,275,000. For the conventional side, see our conforming loan limits guide.
How does FHA mortgage insurance work?
FHA loans carry two insurance costs: a 1.75% upfront premium (UFMIP), usually financed into the loan, and an annual MIP paid monthly. With the minimum 3.5% down, MIP generally stays for the life of the loan, so many buyers later refinance into a conventional loan to drop it once they reach ~20% equity. Learn how to remove mortgage insurance.
FHA vs. conventional: which should you choose?
FHA wins for lower credit scores and small down payments; conventional wins if you have 5–20% down and good credit (its PMI is cancellable and can be cheaper). Veterans should compare a VA loan first. Use our mortgage calculator to compare real payments.
What FHA mortgage insurance costs on a real loan
Here is an example on a $500,000 FHA loan with 3.5% down. Figures are illustrative.
| Item | Cost | Note |
|---|---|---|
| Upfront MIP (1.75%) | $8,750 | Usually added to the loan |
| Annual MIP (about 0.55%) | About $2,750 a year | About $229 a month |
| How long annual MIP lasts | Life of the loan | With less than 10% down |
| With 10% or more down | Annual MIP for 11 years | Then it drops off |
That monthly MIP is part of your housing payment when a lender checks your debt-to-income ratio, so budget for it from the start.
FHA waiting periods after bankruptcy or foreclosure
FHA is more forgiving than conventional after a major credit event.
| Event | FHA | Conventional |
|---|---|---|
| Chapter 7 bankruptcy | 2 years from discharge | 4 years |
| Chapter 13 bankruptcy | 1 year of on-time plan payments, with court approval | 2 years from discharge |
| Foreclosure | 3 years | 7 years |
Re-established credit after the event matters as much as the calendar.
Seller help and property rules
FHA lets the seller pay up to 6% of the price toward your closing costs, prepaid items and similar costs. That can cut the cash you bring to closing. The home must also meet FHA’s minimum property standards, so the appraiser will flag safety or soundness problems such as peeling paint on older homes or a broken heating system. If you want to buy and fix a home, ask about the FHA 203(k). Compare your payment with our FHA loan calculator. Rates change daily, so for an accurate quote call 949-379-5320 (Newport Beach) or 310-759-4757 (Marina del Rey).
Frequently asked questions
What credit score do I need for an FHA loan in California?
580 or higher lets you put down the minimum 3.5%. Scores of 500–579 can still qualify but require 10% down. Higher scores improve your rate but don't change FHA's down-payment tiers.
Can I use an FHA loan for an investment property?
No, FHA loans are for primary residences only. However, you can buy a 2–4 unit property with 3.5% down, live in one unit, and rent the others ('house hacking'), which is FHA-eligible.
Does FHA mortgage insurance ever go away?
With the minimum 3.5% down, the annual MIP generally lasts the life of the loan. The common strategy is to build ~20% equity and refinance into a conventional loan to eliminate mortgage insurance.
Can the seller pay my closing costs on an FHA loan?
Yes. FHA allows seller concessions of up to 6% of the sales price toward closing costs, prepaid items and similar costs. Concessions cannot be used for your minimum 3.5% down payment.
How long after bankruptcy can I get an FHA loan?
Generally 2 years after a Chapter 7 discharge, or after 1 year of on-time Chapter 13 plan payments with court approval. After a foreclosure, the usual wait is 3 years.
About this guide: Save Financial is a California-licensed mortgage broker (NMLS #377740, DRE #01875766) serving all 58 counties. Get a custom quote or call 949-379-5320.