FHA is the go-to program for first-time California buyers with credit under 700 or limited down payment. 3.5% down with 580+ FICO. DTI up to 56.9% with compensating factors.
Trade-off: FHA charges an upfront mortgage insurance premium (UFMIP) of 1.75% — typically financed into the loan — plus a monthly MIP that stays for the life of the loan on most current FHA files. Many borrowers refinance into conventional once they hit 20% equity to drop the lifetime MIP.
The 2026 FHA floor is $541,287 and the FHA ceiling is $1,249,125. Los Angeles County's one-unit limit is at that ceiling. Other counties differ, and 2–4 unit limits are higher. The table is at https://www.franciscowilliams.com/resources/california-loan-limits-2026.