An FHA loan is a mortgage insured by the Federal Housing Administration (FHA) and designed to help borrowers with lower credit scores, smaller down payments, or limited savings qualify for home financing.
This is especially useful in California, where home prices are high and traditional loan requirements can be harder to meet.
FHA loans are widely used by first‑time homebuyers and those who need more flexible qualification standards.
Key Features of FHA Loans in California
1. Low Down Payment
• Minimum 3.5% down for borrowers with a 580+ credit score
• Higher down payment required for lower scores
(General FHA guidelines referenced in CA programs)
2. Flexible Credit Requirements
• FHA loans are designed for borrowers with lower credit scores or limited credit history.
3. Government‑Insured
• FHA insures the loan, reducing lender risk and making approvals easier for borrowers who may not qualify for conventional financing.
4. High California Loan Limits
California has some of the highest FHA loan limits in the country, due to high home prices.
Loan limits vary by county:
• As low as $524,225 in Alpine County
• As high as $2,326,875 in Alameda County for a 4‑unit property
This makes FHA loans viable even in expensive markets.
5. Primary Residence Only
California’s CalHFA FHA program requires the borrower to occupy the property as a primary residence—no non‑occupant co‑borrowers allowed.