Do you have the income and credit score to qualify for a home loan, but aren’t quite there yet with the down payment?
No worries. There are several Down Payment Assistance loans available to help cover your down payment. Most of these programs will help with 3% to 5.5%, which is enough to cover the minimum required down payment for Conventional and FHA loans. Some of these programs even offer additional grant money to help with the closing costs. These down payment assistance programs and grants are typically structured as secondary financing and may have repayment, resale, or refinancing conditions.
Quite possibly the most helpful program available is called the CalHFA Dream For All program that is expected to return in 2026, subject to funding availability and final program guidelines. It’s a shared appreciation loan from the state agency known as CalHFA. The program provides up to 20% in down payment assistance.
One key eligibility requirement is that the borrower generally must not have owned a home within the past seven years. Last year, Dream For All required a minimum credit score of 680 and was a Conventional loan, which also had the 660-score caveat for 80% Area Median Income.
Registration for this program begins on February 24 and will be open to register until March 16 (based on currently published information). Visit CalHFA’s website to learn more. It is good to keep in mind that the program terms, eligibility requirements, and availability are subject to change and are determined by CalHFA. Last year there was a drawing that awarded the assistance at random, and not everyone who applied received a voucher.
Credit score requirements vary by loan type and program. In general, Conventional loans typically require scores around 680, while FHA programs may allow scores as low as 600. In some cases, lower Conventional scores may be considered when income falls below area median thresholds.
When it comes to income, as long as your income is enough to offset your monthly debts plus the full monthly payment* for your new home by a ratio of 45% (sometimes up to 50%), that is often sufficient to be considered for approval, depending on the loan program and overall financial profile.
* The full monthly payment for your home includes the Principal, Interest, Property Taxes, Homeowners Insurance and Mortgage Insurance or HOA Dues, if any exist. FHA loans will always have mortgage insurance and Conventional loans will if the down payment is not 20% or more.
Disclaimer
What this page is meant to do:
Provide a high-level overview of down payment assistance concepts in California.
What it is not:
A determination of eligibility, approval, or program availability. Every borrower and program is different.
This information is for educational purposes only and does not constitute a loan commitment or approval. Loan programs, guidelines, and eligibility requirements are subject to change.