First-Time Home Buyers in California: CalHFA, MyHome & FHA Loans

Yes. If your tax returns show enough income after add-backs like depreciation, you can use FHA, conventional or CalHFA loans like any first-time buyer. If write-offs leave too little income on your returns, a bank statement loan can qualify you on 12 or 24 months of deposits instead. Many bank statement programs accept first-time buyers.

No. CalHFA’s MyHome Assistance Program can only be used with a CalHFA first mortgage, which is an FHA, conventional, VA or USDA loan qualified on standard income documents. If you buy with a bank statement loan, plan to bring your own down payment. About 20% down was typical in our self-employed files.

Per HUD and most California programs, a first-time home buyer is someone who has not owned a primary residence in the last 3 years. This rule lets you qualify as a first-time buyer multiple times across your life. A single parent who only owned with an ex-spouse, a displaced homemaker, or anyone who only owned non-permanent housing (like a mobile home not affixed to land) may also qualify as a first-time buyer for certain programs.

The lowest down payment for non-veterans is 3% on a conventional 97 loan (Fannie Mae HomeReady or Freddie Mac Home Possible). FHA is 3.5%. With CalHFA's MyHome down payment assistance stacked on top of FHA, total out-of-pocket can drop to about 0.5% – 1.5% of the purchase price: roughly $4,000 – $12,000 on a $750,000 home. Veterans can buy with $0 down via VA.

CalHFA's MyHome assistance is a 'silent second' lien (no monthly payment, no interest accrual) that becomes due only when you sell, refinance, or transfer the home. It is not forgiven. The Forgivable Equity Builder (a separate CalHFA program for very-low-income buyers) IS forgiven after 5 years if you continue to occupy the home as your primary residence. Save Financial works with approved CalHFA lenders and offers both.

On the California median home price of about $850,000 with 3.5% down (FHA), you'd want approximately $135,000 – $165,000 in annual household income to qualify comfortably. In lower-cost markets like Fresno ($380,000 median) or Bakersfield ($340,000 median), you'd need only $60,000 – $75,000 income. Save Financial works with buyers across the full income spectrum: call us with your numbers and we'll tell you exactly what you can buy.

Yes. 100% of the down payment on an FHA or conventional loan can come from a documented gift from a family member, fiancé, domestic partner, or close personal friend with a 'clearly defined and documented interest' in the borrower. The gift must be properly documented with a gift letter, source-of-funds verification from the giver's bank, and a paper trail of the funds transferring. Save Financial handles the paperwork for you.

FHA accepts FICO scores as low as 580 with 3.5% down (some lenders go to 500 with 10% down). Conventional requires 620+. For best pricing and lowest mortgage insurance, aim for 700+ FICO. Save Financial offers free credit-improvement consultations to first-time buyers, typically we can lift a 620 score to 680+ within 90 days through rapid rescore and credit-utilization optimization.

It depends on credit and down payment. FHA wins for FICO scores under 680, smaller down payments (3.5%), and slightly higher DTI tolerance (up to 57%). Conventional wins for FICO 700+, down payments of 5%+, and buyers planning to refinance out of PMI within 2-5 years. Save Financial runs the math both ways at no charge and shows you total 5-year and 10-year cost on each option.

First-time buyer closing costs in California typically run 2% – 3% of the purchase price: about $15,000 – $22,500 on a median-priced home. CalHFA's ZIP (Zero Interest Program, where available) and various seller-credit negotiations can cut this in half or eliminate it entirely. Sellers can legally contribute up to 6% on FHA loans and 3% on conventional loans toward buyer closing costs as part of negotiations.

Get pre-approved. Save Financial's free 24-hour pre-approval reviews your credit, income, and assets, then issues a written letter stating exactly what you can buy. With that in hand, you can shop with confidence and make offers Realtors and sellers take seriously. Pre-approval costs nothing and doesn't commit you to anything.

Mortgage interest deduction and property tax deduction are available to all California homeowners (subject to federal $750,000 mortgage cap and $10,000 SALT cap). A specific federal first-time homebuyer credit existed in 2008-2010 but does not currently exist; legislation to revive it has been proposed but not passed. California offers the Mortgage Credit Certificate (MCC) program through CalHFA, which converts a portion of mortgage interest into a direct federal tax credit (up to $2,000/year) for eligible first-time buyers: Save Financial helps you apply for the MCC alongside your loan.

Most first-time home buyers in California put down 3% to 3.5%, not the traditional 20%. A conventional 97 loan needs 3% down and FHA needs 3.5%. Down payment assistance and documented gift funds can cover much of that, so many buyers reach the closing table with little cash out of pocket.

California first-time buyers can tap down payment assistance through CalHFA, including programs such as MyHome and Dream For All, plus city and county grants in areas like Los Angeles and San Diego. These programs help cover the down payment. Working with CalHFA-approved lenders, Save Financial confirms current eligibility and amounts for you.

Yes. Under HUD and most California program rules, you qualify as a first-time buyer again if you have not owned a primary residence in the past three years. Previously owning a home you sold, or an investment property, doesn't disqualify you, so many repeat buyers still access first-time buyer programs.