How much down payment do you need in California?

Last updated August 31, 2026

By Kurt Mellinger, Principal Agent, Ascension Estates at Equity Union Real Estate. DRE #02238998.

Far less than 20 percent. Conventional loans start near 3 to 5 percent down, FHA allows 3.5 percent, and eligible veterans can buy with zero down through VA. Twenty percent is the line where mortgage insurance disappears, and somewhere along the way people turned that into a rule. It never was one.

The 20 percent myth keeps renters renting for years longer than they need to. So let us kill it carefully, because the truth has real tradeoffs and you should see all of them.

Do you really need 20 percent down?

No. Here is where the myth comes from. Put down less than 20 percent on a conventional loan and the lender adds private mortgage insurance, PMI, to your payment. Put down 20 and the PMI line vanishes. That single pricing rule got repeated for decades until it sounded like a legal requirement.

It is a cost line, and cost lines are decisions. Plenty of smart buyers pay PMI on purpose, because saving 20 percent of a Los Angeles or Ventura County price can take a decade, and prices and rents move while you save. PMI also ends, which the next sections cover. The question worth asking is never whether you have 20 percent. It is which combination of down payment, monthly payment, and leftover cash fits your life.

What are the real minimum down payments by loan type?

Program floors are set by the agencies behind the loans, and they get adjusted from time to time. Treat the figures below as the shape of the menu, then confirm the current floors with your lender.

Every low-down path shares one catch. A smaller down payment means a bigger loan, a bigger payment, and less equity cushion if prices dip. The floor tells you what is possible, and your budget tells you what is wise. Run both through the Purchase Power calculator and look at the monthly difference before you decide.

What do those percentages look like in dollars?

Percentages hide the real gap, so put dollars on them. Take an illustrative $800,000 purchase. This is arithmetic on a round number, chosen because plenty of homes in our two counties trade near it, and it is a teaching example rather than a price prediction.

Read that list again slowly. The gap between the bottom and the top is $136,000 on the same house. For most households that gap equals years of saving, and those are years of paying rent while prices do whatever they do. That is the real cost of treating 20 percent as a rule, and it is why the low-down programs exist.

What about jumbo loans at LA and Ventura prices?

Here is the wrinkle our price points add. Fannie and Freddie only back loans up to the conforming loan limit, a cap the FHFA resets every year, with higher caps in high-cost counties like Los Angeles. Borrow above the cap and you are in jumbo territory, where no agency stands behind the loan and each lender writes its own rules.

Jumbo lenders take more risk per loan, so they typically ask for more. Larger down payments, stronger credit, and more months of reserves in the bank are all common asks, and the exact requirements vary widely from one bank to the next. The limit number changes every year, so look it up at fhfa.gov or ask your lender which side of the line your loan falls on. At many LA and Ventura price points, that answer decides your minimum down payment more than any program floor does.

One planning move follows from this. Near the limit, a slightly larger down payment can pull your loan amount under the conforming cap and change the entire menu of loans available to you. Ask your lender to price it both ways.

What is PMI and when does it drop off?

PMI is insurance you pay for that protects the lender if you default. It exists so lenders can accept small down payments. It is a monthly cost, priced on your credit and how little you put down, and your lender quotes your actual number.

The good news is federal law puts an expiration date on it. Under the Homeowners Protection Act, you can ask your servicer to cancel PMI once your loan balance falls to 80 percent of the home's original value, meaning the lower of your purchase price or the original appraisal. Stay current and the servicer must end it automatically once the balance hits 78 percent on schedule. Paying extra principal gets you to those lines sooner, and some servicers will also remove PMI early based on a new appraisal after strong appreciation. Ask yours for its rules in writing.

FHA plays by different rules. Its annual mortgage insurance can run for the life of the loan at the lowest down payments under current HUD terms, and many FHA borrowers later refinance into conventional loans to shed it. Check the current rules with HUD or your lender before you choose FHA for the long haul.

Is a bigger down payment always better?

No, and this is where eager buyers hurt themselves. Every extra dollar you put down buys a smaller payment and less interest over time. The same dollar stops being available for anything else, and year one of a house asks for dollars constantly.

Think about what that cash defends you from. A furnace that dies in November. An insurance premium that jumps at renewal, which is a live issue in California fire zones. A layoff three months after closing. A buyer who put 10 percent down and kept a year of payments in the bank is safer than one who scraped to 20 and closed with empty accounts. Some loans require months of reserves anyway. Hold reserves even when yours does not.

The full cash picture is bigger than the down payment too. Closing costs, prepaid insurance, and the impound account all land on top, in cash, at closing. The buyer net sheet itemizes every one of those lines for your price range, and we broke down who pays which costs in who pays closing costs in California.

Can your down payment be a gift?

Yes, and in family-priced markets like ours it happens all the time. Lenders allow gift funds on most programs, with paperwork rules that exist to prove the money is a gift and never a hidden loan.

Expect three things. First, a gift letter signed by the giver, stating the amount, their relationship to you, and that no repayment is expected. Second, a paper trail, meaning statements showing the money leaving the giver's account and landing in yours or in escrow. Third, limits on who can give, since most programs restrict gifts to family members and a few other close relationships. Move gift money early, weeks before you write offers, and never in cash. A large unexplained deposit during underwriting creates exactly the kind of question that delays closings.

Does California help with down payments?

Yes. CalHFA, the California Housing Finance Agency, runs state programs that pair a first mortgage with down payment and closing cost help, often structured as a deferred junior loan you repay when you sell or refinance. Programs come with income limits, first-time buyer rules, and funding that opens and closes, and the details change often enough that anything specific we printed here would go stale. Read the current programs at calhfa.ca.gov and work with a CalHFA-approved lender if one fits, since only approved lenders can write those loans.

One honest limitation. Loan program floors, mortgage insurance pricing, conforming limits, and assistance programs all shift over time, and this page teaches the structure rather than today's fine print. The structure is durable. The decimals belong to your lender, the FHFA, HUD, and CalHFA, so confirm current terms there before you commit. And the down payment question never stands alone, because it is one input into what you can actually carry each month. We wrote that math out in how much house can I afford.

This is not lending, tax, or legal advice. Loan approval depends on your full file, and program terms change without notice. Confirm every figure with your lender and, where taxes enter the picture, your CPA.