Is It Possible to Buy a Home With No Down Payment in California?

As home prices continue to rise in California, buyers are getting skeptical about their shot at homeownership due to down payment requirements. 

When you think about buying a home, one of the first things you should consider is whether you can pay the down payment. 

The good news is there are low down payment options you can look at and even a no down payment loan in Woodland Hills, CA.

Let’s take a look at how much down payment you need to buy a home in Cali and what options you have if your savings is not enough for the down.

Do you need to put down 20%?

A down payment is an upfront payment required when buying a home. The amount is usually expressed as a percentage of the purchase price, depending on your chosen loan product. 

Some Californians still believe in the myth that you need to put down 20% when buying a home.  

Different loan programs have various down payment requirements, and yes, they are lower than the 20% misconception many still have.

Conventional loans have minimum down payment requirements as low as 3%. However, if you have a high DTI or credit score lower than 620, you can still get approved for a loan but with a higher down payment requirement.

An FHA loan is a government-backed loan that gives home buyers a chance to own a home with as little as a 3.5% down payment. This type of loan has less stringent financial and credit requirements, making it an excellent alternative to conventional mortgages.

To learn more about your options, get in touch with a trusted mortgage advisor in Woodland Hills, CA.

What are the average down payments in California?

Based on a survey done by the National Association of Realtors, the average down payment of first-time home buyers in California is 6%. The average for all home buyers is 12%

Let’s take a look at an example. A single-family home in LA County typically sells for $650k, while the median price for a condo is $530k. If you are a first-time home buyer you may need to put down $39k for a Single Family Home and $31,800 for a condo. 


Am I required to pay for PMI?

PMI or private mortgage insurance protects lenders if you default on your loan.

If you plan to apply for a conventional loan with low down payment options, you must pay for PMI or private mortgage insurance. PMI is a must if you apply for a loan with a down payment of less than 20%.

You have the option to pay PMI as monthly premiums or a one-time upfront premium upon closing. 

You can negotiate to remove PMI, but your interest rate may be higher as a result. PMI cancellation can be requested once you reach 20% equity on your home.

Can you buy a home with no down payment in CA?

The answer is yes. You have 2 government-backed loan options that offer zero down payment programs. 

If you don’t mind living in the suburbs, then a USDA loan is a great option. You can purchase a home with no money down if the property is in a qualified rural area.

If you are an active member or veteran, you may qualify for a VA loan which also offers a no-down payment option. This loan is backed by the Department of Veteran Affairs and is a big help to military personnel as it gives them a chance to own a home with little upfront cash. 

If you want to learn more about no down and low down payment loan products, you can inquire about a mortgage loan by Nuline Funding. You’ll indeed find the right loan product that fits your needs.

Are you ready to buy your new California home?

Isn’t it a relief to know that you don’t need a large down payment to buy your California home? If you qualify for a zero-down loan, you don’t need to put down any cash for a down payment.

We understand that every aspiring homebuyer has different financial capabilities. We can help you pick a home loan that aligns with your long-term plans.

Give us a call or send us a message on our website and let’s begin your journey towards homeownership.


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.