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Loan Options · By Use-Case

Low-down-payment loan options in California.

You do not need 20% down to buy in California. This page lists the loan programs that allow low or no down payment, with the trade-offs of each. It is a quick menu to help you find the lowest-cash path, in plain language.

If saving a big down payment is your hurdle, these options can get you into a home sooner. Let's compare them.

A young couple amid moving boxes after buying with a low down payment
Quick answer

Low-down-payment loan options in California include the conventional 97 (3% down), FHA (3.5% down), VA (0% down for veterans), and USDA (0% down in eligible areas). You can also use down payment assistance to lower your cash further, or a piggyback loan to avoid PMI. With less than 20% down, you usually pay mortgage insurance until you build equity.

What this means

A low down payment means a smaller upfront cost in exchange for a larger loan and usually mortgage insurance. The benefit is buying sooner; the trade-off is the added monthly cost until you build equity.

There are also clever ways to lower the cash or avoid PMI, like assistance programs and piggyback loans. See Down Payment Assistance (DPA) and Piggyback Loans (80-10-10).

The low-down loan menu

OptionDown paymentMortgage insuranceDetails
Conventional 973%PMI, removable laterFHA vs Conventional
FHA3.5%Often for lifeFHA
VA0%NoneVA
USDA0%Small feesUSDA
Piggyback (80-10-10)10%None (avoids PMI)Piggyback Loans (80-10-10)

Ways to lower cash even more

Down payment assistance. CalHFA and others can cover part of your costs.
Gift funds. Family can help, with documentation.
Lender or seller credits. Help with closing costs.
Step by step

How to choose

1
Check eligibility. Veteran → VA. Eligible area → USDA.
2
Check credit and savings. FHA for flexible credit; conventional 97 for strong credit.
3
Decide on PMI. Conventional PMI can be removed; FHA often cannot.
4
Consider a piggyback. To avoid PMI with 10% down.
5
Add assistance. To lower your cash further.
6
Compare total cost. Including insurance over time.

Requirements (at a glance)

OptionTypical requirement
Conventional 97~620+ credit
FHA~580+ credit
VAEligible service
USDAEligible area and income
PiggybackStrong credit; two loans

Benefits

Buy sooner. No need to save 20%.
Keep cash. Hold savings for emergencies.
Many paths. A program for most situations.
PMI removal on conventional loans. See Down Payment Options.
Zero-down options. For eligible VA and USDA buyers.

Potential drawbacks (the honest part)

Mortgage insurance. Common with low down payments.
Higher payment. A bigger loan means more each month.
Less equity at first. Smaller cushion to start.
Closing costs still apply. Budget for those too.
Real-world California examples

What it looks like in practice

Conventional 97 in Sacramento
Conventional 97 in Sacramento

Maria puts 3% down on a conventional loan, planning to remove PMI later as her equity grows.

Piggyback to avoid PMI in Orange County
Piggyback to avoid PMI in Orange County

Marcus uses an 80-10-10 to put 10% down and avoid PMI. See Piggyback Loans (80-10-10).

USDA zero-down in the Central Valley
USDA zero-down in the Central Valley

The Torres family buys in an eligible area with a USDA loan and no down payment. See USDA.

Examples are for learning only. Your options depend on your situation.

Common mistakes

1Thinking 20% is required. Low-down options are common.
2Ignoring PMI differences. Conventional PMI can be removed; FHA often cannot.
3Forgetting closing costs. They are separate from the down payment.
4Skipping assistance. It can lower your cash further.
5Overlooking the piggyback option. It can avoid PMI.
6Not comparing total cost. Look beyond the down payment.
Good questions

Frequently asked questions

0% with VA or USDA for those who qualify, or 3% with a conventional 97 loan.

Next steps

Find your lowest-cash path

Low-down-payment loans make buying possible without years of saving. Compare the options and add assistance to lower your cash. EZ Online Mortgage can show which low-down path costs the least for your situation.

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Keep learning

This page is for education only. It is not a loan offer or a promise of approval, rates, or terms. Qualification depends on your individual circumstances. Equal Housing Opportunity · NMLS #362311 · CA DRE #01871814.

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