Down payment help for first-time buyers in California and LA County

The down payment is the number one thing that keeps renters from buying. Most of the first-time buyers I work with think they need 20% down. Most don't.

Here's what's out there in California and LA County. Program rules, income limits and funding change often, so treat this as a starting point and confirm the current details with a lender who works with these programs.

Start with low down payment loans

• FHA loans allow 3.5% down with a credit score of 580 or higher.
• Conventional loans for first-time buyers can go as low as 3% down.
• VA loans let eligible veterans and service members buy with nothing down.

On a $650,000 home, 3.5% down is $22,750. That's still real money, which is where the programs below come in.

CalHFA

The California Housing Finance Agency offers first mortgages for first-time buyers and down payment help that can be layered on top. Their MyHome Assistance program is a deferred loan, which means you don't make monthly payments on it. You pay it back when you sell, refinance or pay off the home. You'll need to meet income limits for your county and take a homebuyer education course.

California Dream For All

This is the state's shared appreciation program. It can cover a large part of the down payment. Instead of interest, you repay the original amount plus a share of the home's appreciation when you sell or refinance. It's been offered in funding rounds, with high demand, so you have to watch for when it opens.

LA County's Home Ownership Program

LA County's Home Ownership Program (HOP), run by the LA County Development Authority, offers a deferred loan toward the down payment for income-qualified first-time buyers. There are rules about which areas qualify and price limits on the home. Check LACDA's website for the current amounts.

Other ways to cover the down payment

• Gift money from family. Most loan types allow it with a signed gift letter.
• Seller credits. When the market allows, we negotiate for the seller to pay part of your closing costs, so more of your cash goes to the down payment.
• Homes that have sat on the market. Sellers of these homes are more open to credits and price cuts. That's why we put together a list of homes likely to sell below asking.

What to do first

1. Check your credit and pay down card balances if you can.
2. Run your buying power so you know your price range and payment.
3. Talk to a lender who works with CalHFA and county programs. I can introduce you to one.
4. Take a homebuyer education course early, since most programs require it.

Common questions

Program details change. I'm a REALTOR®, not a lender, so please confirm current rules and amounts with a lender before you plan around any program.

Want help figuring out which ones fit you? Start with our first-time buyer guide.