FHA loans are still the most common way California first-time buyers get into a home without a 20% down payment. The basic deal is simple: a credit score of 580 or higher and 3.5% down. What makes the difference in California is what you pair with it. CalHFA's state-run programs can cover your down payment and closing costs, and the 2026 loan limits now reach high enough for most Orange County condos and townhomes.
Below: 2026 county loan limits, current mortgage insurance costs, the CalHFA programs that work with FHA, and the math on a real Orange County purchase, from Ali Shariat, a Realtor and licensed loan officer.
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FHA in California at a Glance
- Down payment: 3.5% with a credit score of 580 or higher. Scores from 500 to 579 need 10% down.
- 2026 loan limits: up to $1,249,125 for a single-family home in Orange and Los Angeles counties, $1,104,000 in San Diego County, and $690,000 in Riverside and San Bernardino counties.
- Mortgage insurance: 1.75% upfront plus an annual premium, usually 0.50% to 0.75% of the loan.
- Down payment help: CalHFA's MyHome loan can cover up to 3.5% of the price for first-time buyers using a CalHFA FHA first mortgage.
FHA Loan Requirements in 2026
The Federal Housing Administration (part of HUD) doesn't lend money itself. It insures loans made by approved lenders, which is why lenders will accept lower credit scores and smaller down payments. The core rules are national.
Credit score and down payment
HUD bases eligibility on your "minimum decision credit score." For a purchase, the tiers are:
- 580 or higher: eligible for maximum financing. That's a 96.5% loan-to-value, so 3.5% down.
- 500 to 579: maximum 90% loan-to-value, so 10% down.
- Below 500: not eligible for FHA financing.
One change is coming. Under HUD Mortgagee Letter 2026-11, FHA lenders can use FICO 10T and VantageScore 4.0 alongside Classic FICO for case numbers assigned on or after January 1, 2027. These newer models can count rent and utility payment history. The 500 and 580 thresholds don't change.
Keep in mind that these are FHA's floors. Many lenders set higher minimums, and CalHFA requires 640.
Occupancy and residency
- The home has to be your primary residence. FHA covers one to four units, so you can live in one unit of a duplex or fourplex and rent out the others.
- Since May 25, 2025, non-permanent residents are no longer eligible for FHA loans. Eligible borrowers are U.S. citizens, lawful permanent residents (green card holders), and citizens of the Federated States of Micronesia, the Marshall Islands and Palau.
Your 3.5% can come from savings, a documented gift from family, or approved assistance such as CalHFA's MyHome. Sellers can contribute up to 6% of the price toward your closing costs.
Property standards and condos
FHA appraisers check that the home meets HUD's minimum property standards. Major health and safety problems, like a failing roof or exposed wiring, may need to be fixed before closing. If you're buying a condo, the project needs FHA approval, or the individual unit needs a single-unit approval. Check whether the project is approved before you write an offer, not after.
2026 FHA Loan Limits in Southern California
HUD sets FHA loan limits by county each year. The 2026 limits apply to case numbers assigned on or after January 1, 2026. The national range for a one-unit home is $541,287 to $1,249,125. Here's where the counties Ali serves land, from HUD's FHA mortgage limits lookup:
| County | 1 unit | 2 units | 3 units | 4 units |
|---|---|---|---|---|
| Orange | $1,249,125 | $1,599,375 | $1,933,200 | $2,402,625 |
| Los Angeles | $1,249,125 | $1,599,375 | $1,933,200 | $2,402,625 |
| San Diego | $1,104,000 | $1,413,350 | $1,708,400 | $2,123,100 |
| Riverside | $690,000 | $883,300 | $1,067,750 | $1,326,950 |
| San Bernardino | $690,000 | $883,300 | $1,067,750 | $1,326,950 |
Show the data
| Year | Limit |
|---|---|
| 2019 | $726,525 |
| 2020 | $765,600 |
| 2021 | $822,375 |
| 2022 | $970,800 |
| 2023 | $1,089,300 |
| 2024 | $1,149,825 |
| 2025 | $1,209,750 |
| 2026 | $1,249,125 |
Source: HUD FHA mortgage limits. Orange County sits at the high-cost ceiling, so the conforming limit is the same each year.
The limit is the maximum base loan amount, not the maximum purchase price. With 3.5% down, the top single-family price in Orange County is about $1.29 million. Above that, you'd need a bigger down payment or a different loan. HUD announced the 2026 limits in December 2025, so expect 2027 figures around the end of this year.
The Inland Empire is the exception. Riverside and San Bernardino FHA limits sit well below the 2026 conforming baseline of $832,750 that the FHFA sets for conventional loans. Buyers there above the FHA limit may need conventional financing.
What FHA Mortgage Insurance Costs
Every FHA borrower pays mortgage insurance premium (MIP). It comes in two parts.
- Upfront MIP: 1.75% of the base loan amount. Most buyers roll it into the loan instead of paying it in cash.
- Annual MIP: a percentage of the loan balance, paid monthly with your mortgage. The current rates were set in HUD Mortgagee Letter 2023-05.
| 30-year loan | Down payment | Annual MIP | How long you pay it |
|---|---|---|---|
| Base loan up to $726,200 | Less than 5% | 0.55% | Life of the loan |
| Base loan up to $726,200 | 5% to 10% | 0.50% | Life of the loan |
| Base loan up to $726,200 | 10% or more | 0.50% | 11 years |
| Base loan over $726,200 | Less than 5% | 0.75% | Life of the loan |
| Base loan over $726,200 | 5% to 10% | 0.70% | Life of the loan |
| Base loan over $726,200 | 10% or more | 0.70% | 11 years |
Two things stand out for Orange County buyers. First, the $726,200 threshold matters here. With 3.5% down, any price above about $752,500 crosses it, and that raises the annual premium from 0.55% to 0.75%. That covers a lot of Orange County condos and townhomes. Second, with less than 10% down, MIP stays for the life of the loan. Refinancing to conventional later can remove it, but that depends on future rates and values.
CalHFA Programs That Pair With FHA
Buying in Orange County? City and county programs in Santa Ana, Garden Grove, Anaheim and unincorporated areas can add to CalHFA. See our guide to Orange County first-time buyer programs.
The California Housing Finance Agency (CalHFA) doesn't lend directly either. It works through approved lenders, and its current program list is on the CalHFA loan programs page. These are the FHA options:
CalHFA FHA
An FHA-insured 30-year fixed first mortgage. On its own, it doesn't require you to be a first-time buyer. Most buyers use it because it can be combined with MyHome.
MyHome Assistance Program
A deferred-payment junior loan with simple interest. With a CalHFA FHA or CalPLUS FHA first mortgage, MyHome can be up to 3.5% of the purchase price or appraised value, whichever is less. You can use it for your down payment, closing costs or both. You make no monthly payments. You repay it, plus interest, when you sell, refinance, pay off the first loan or transfer title. MyHome requires you to be a first-time homebuyer.
CalPLUS FHA with ZIP
CalPLUS FHA carries a slightly higher rate than CalHFA FHA. In exchange, it comes with the Zero Interest Program (ZIP), a deferred, 0% loan for closing costs only. According to CalHFA's handbook, ZIP is 2% or 3% of the first mortgage amount, depending on the day's pricing. CalPLUS FHA must also be combined with MyHome. It fits buyers who can handle the payment but are short on cash for both the down payment and closing costs.
CalPLUS Access FHA
Pairs the first mortgage with MyAccess, a deferred loan for down payment or closing costs, on top of MyHome. Ask your loan officer whether it beats CalPLUS FHA on your numbers. More detail is in our CalPLUS FHA guide.
Dream For All (not an FHA program)
Buyers often ask about Dream For All. It's a shared-appreciation loan of up to 20% of the price (capped at $150,000) for first-generation buyers. But it's used only with CalHFA's Dream For All Conventional first mortgage, not FHA. The application window for the current round closed March 16, 2026, according to CalHFA's Dream For All page. Watch that page for future rounds.
CalHFA Eligibility: Income, Credit and Education
CalHFA adds its own requirements on top of FHA's:
- First-time buyer: no ownership interest in a principal residence in the past three years. This applies when you use MyHome, ZIP or MyAccess.
- Income limit: set by county (see table below).
- Credit score: a 640 minimum for CalHFA's FHA programs, or 660 for manually underwritten loans and manufactured homes. Borrowers with no credit score aren't eligible.
- Debt-to-income: up to 50% with a score of 700 or higher, and 45% below 700, per CalHFA's government loan handbook.
- Education: one occupying first-time buyer must complete homebuyer education. Options are eHome's eight-hour online course (about $100) or a live course through NeighborWorks America or a HUD-approved agency.
- Occupancy: you must move in within 60 days of closing. No non-occupant co-borrowers.
- Home warranty: first-time buyers using CalHFA need a one-year home warranty.
CalHFA's 2026 income limits took effect June 30, 2026:
| County | 2026 CalHFA income limit |
|---|---|
| Orange | $274,000 |
| San Diego | $259,000 |
| Los Angeles | $214,000 |
| Riverside | $210,000 |
| San Bernardino | $210,000 |
FHA vs. Conventional in California
FHA isn't automatically the best choice. Here's how it compares with a conventional loan for a typical first-time buyer:
| FHA | Conventional | |
|---|---|---|
| Minimum down payment | 3.5% (580+ score) | 3% for eligible first-time buyer programs |
| Credit flexibility | Forgiving; mortgage insurance cost doesn't change with your score | Pricing and mortgage insurance improve sharply with higher scores |
| Mortgage insurance | 1.75% upfront plus annual MIP, often for the life of the loan | No upfront premium; monthly PMI can be removed as equity builds |
| 2026 one-unit limit | By county: $690,000 to $1,249,125 in SoCal | $832,750 baseline, up to $1,249,125 in high-cost counties |
| Seller credits | Up to 6% | Up to 3% with less than 10% down |
| Condos | Project or unit must be FHA-approved | Fewer project restrictions |
| Low appraisal protection | Built-in amendatory clause | Depends on your appraisal contingency |
In practice, FHA tends to win when your credit score is below the low 700s, your debt-to-income ratio is high, or you need seller credits above 3%. Conventional tends to win with stronger credit and at least 5% down, mainly because PMI can come off. For more detail, see FHA vs. conventional financing.
An Orange County FHA Example
Rough first-year figures, leaving out the interest rate, which changes daily.
$700,000 townhome in Santa Ana
- 3.5% down: $24,500
- Base loan: $675,500
- Upfront MIP (1.75%), financed: $11,821, for a total loan of about $687,321
- Annual MIP at 0.55%: roughly $3,700 a year, or about $310 a month
- If you qualify for MyHome, it could provide up to $24,500 (3.5%) toward the down payment or closing costs. You'd repay it when you sell or refinance.
$800,000 condo in Irvine
- 3.5% down: $28,000
- Base loan: $772,000, which is above the $726,200 threshold
- Annual MIP at 0.75%: roughly $5,800 a year, or about $480 a month
- With 10% down ($80,000), the base loan drops to $720,000. MIP falls to 0.50% (about $300 a month) and ends after 11 years.
A little more down can save real money every month, but cash reserves matter too. Ali runs both scenarios for buyers shopping in Santa Ana and Irvine before they write offers.
Key Takeaways
- FHA still requires just 3.5% down with a 580 score. Starting in 2027, lenders can also use newer credit score models.
- 2026 FHA limits reach $1,249,125 in Orange and Los Angeles counties, $1,104,000 in San Diego County, and $690,000 in the Inland Empire.
- Annual MIP runs 0.50% to 0.75% depending on loan size and down payment. Base loans over $726,200 pay more.
- CalHFA's MyHome can cover up to 3.5% of the price for first-time buyers. CalPLUS FHA adds a 0% closing-cost loan.
- CalHFA income limits are high in Southern California ($274,000 in Orange County), but the 640 credit minimum and education course are firm.
FAQs
What credit score do I need for an FHA loan in California?
FHA itself allows 3.5% down with a score of 580 or higher, and 10% down with a score from 500 to 579. Many lenders set their own higher minimums, and CalHFA's FHA programs require at least 640. Starting January 1, 2027, FHA lenders can also use FICO 10T and VantageScore 4.0, but the minimum scores stay the same.
What is the 2026 FHA loan limit in Orange County?
$1,249,125 for a single-family home or condo and $1,599,375 for a duplex. Los Angeles County is the same. San Diego County's one-unit limit is $1,104,000.
Can CalHFA pay my entire FHA down payment?
It can come close. MyHome provides up to 3.5% of the purchase price or appraised value, whichever is less, when paired with a CalHFA FHA or CalPLUS FHA loan. That matches FHA's 3.5% minimum down payment. You'll still have closing costs, which CalPLUS FHA's ZIP loan or seller credits can help cover. MyHome is a deferred loan, not a grant, so it's repaid when you sell, refinance or pay off the first mortgage.
Do I have to be a first-time buyer to get an FHA loan?
No. FHA loans are open to repeat buyers, as long as the home will be your primary residence. CalHFA's assistance programs (MyHome, ZIP and MyAccess) do require you to be a first-time buyer, which CalHFA defines as not having owned a principal residence in the past three years.
Can I use an FHA loan to buy a condo in Irvine?
Yes, if the condo project is FHA-approved or the unit qualifies for FHA's single-unit approval. Approval status varies by community, so check it before you make an offer. The project also has to meet CalHFA's and its servicer's condo guidelines if you're using CalHFA.
Want to know which FHA or CalHFA option fits your budget, and what you can comfortably buy in Orange County? Ali can review your numbers as your loan officer and help you find the home as your Realtor. Contact Ali or call (949) 818-1000 to set up a free consultation.
