Conventional & Government

Conventional and government loans are the foundation of California home financing: Fannie Mae and Freddie Mac conforming loans up to the county limit, FHA from 3.5% down, VA at 0% down for veterans, USDA for eligible rural areas, and jumbo above the conforming ceiling. The right pick depends on your credit, down payment, and county — not on which lender happens to advertise loudest.

The decision most buyers actually face

For most first-time California buyers the real comparison is FHA versus conventional-with-3%-down. FHA accepts lower scores and higher debt ratios but carries mortgage insurance for the life of the loan on minimum-down files. Conventional PMI cancels at 20% equity — in appreciating California markets that can happen in a few years, which often makes conventional the cheaper 10-year hold even at a slightly higher rate. I run both quotes side by side on every first-time file; the spread regularly surprises people.

High-cost county math

Southern California's high-cost counties — Los Angeles, Orange, Ventura, San Diego — carry elevated conforming limits well above the national baseline, and high-balance conforming pricing sits between standard conforming and jumbo. Knowing exactly where your loan amount lands relative to your county's limit is frequently worth a quarter point. If you're a veteran, VA beats everything: no down payment, no monthly mortgage insurance, no loan limit with full entitlement.

Stack it with assistance

Nearly every program in this category layers with California down-payment assistance— CalHFA's deferred seconds, GSFA grants, and county programs can cover most or all of the cash to close for qualifying buyers. If cash is the constraint, start there before assuming you can't buy.