What Types of Home Loans Are Available in California?

Buying a home in California starts with understanding your financing options. Whether you’re a first-time buyer in San Diego County, a military veteran, self-employed, or purchasing a higher-priced property, there may be a home loan designed for your situation.

The right mortgage depends on your income, credit history, down payment, property type, and long-term financial goals. Here are the main types of home loans to explore before you begin your home search.

5 Types of Home Loans to Know

1. Conventional Loans

Conventional mortgages are offered by banks, credit unions, and mortgage lenders. Some programs allow eligible buyers to purchase with as little as 3% down. Buyers who put down less than 20% generally pay private mortgage insurance (PMI).

2. FHA Loans

Federal Housing Administration (FHA) loans can help eligible buyers qualify with a smaller down payment. Some borrowers may qualify with as little as 3.5% down, subject to credit and other requirements. Mortgage insurance costs apply.

3. VA Loans

VA loans offer eligible veterans, active-duty service members, and certain surviving spouses an opportunity to purchase a home with favorable financing terms. Many qualified borrowers can buy with no down payment and no monthly mortgage insurance. This can be an especially valuable option for San Diego County’s military community.

4. USDA Loans

USDA loans may offer 100% financing for eligible buyers purchasing homes in qualifying rural and suburban areas. Household income and property-location restrictions apply, so check with an approved lender to determine eligibility.

5. Jumbo Loans

Jumbo loans finance amounts above the applicable conforming loan limits. With higher home prices in many San Diego County communities, jumbo financing may be necessary for buyers purchasing more expensive properties. Qualification requirements vary by lender.

Specialized Mortgage Programs

Not every buyer fits a traditional mortgage profile. Depending on the lender and property, specialized options may include:

• Renovation loans: Finance a home purchase and eligible improvements through a single mortgage.
• Adjustable-rate mortgages (ARMs): Offer an interest rate that may initially be lower than a comparable fixed-rate loan but can change over time.
• Manufactured-home loans: Provide financing for eligible manufactured homes, depending on the home, land ownership, and loan program.
• Self-employed and bank-statement loans: Certain lenders offer alternative ways to document income for eligible self-employed borrowers who may not qualify using standard income calculations.
• Non-qualified mortgage (non-QM) loans: Offer alternative underwriting options for certain borrowers with complex income or financial circumstances. These may have higher rates or fees than conventional mortgages.

Specialized loan availability and qualification requirements vary. Compare costs and terms carefully before choosing a program.

Are There Homebuyer Assistance Programs in San Diego County?

Yes! In addition to mortgage financing, eligible buyers may qualify for down payment or closing-cost assistance through the California Housing Finance Agency (CalHFA), the City of San Diego, the City of Chula Vista, or certain San Diego County programs.

Eligibility, income limits, purchase-price limits, geographic coverage, and available funding vary. Some programs can be paired with an eligible mortgage, so ask your lender to review both your loan options and available assistance.

Explore official resources:

• California Housing Finance Agency (CalHFA)
• San Diego Housing Commission homebuyer programs
• San Diego County housing assistance

Which Home Loan Is Right for You?

The best mortgage is the one that fits your circumstances—not necessarily the one with the lowest advertised rate or down payment.

Before choosing a loan, compare interest rates, monthly payments, mortgage insurance, closing costs, qualification requirements, and the total cost of borrowing. A qualified mortgage lender can help you determine which programs you may be eligible for and whether homebuyer assistance can be combined with your mortgage.

Thinking about buying a home in San Diego County? Start by exploring your financing options before you start house hunting. Understanding what’s available can help you build a realistic budget, prepare for upfront costs, and move toward homeownership with greater confidence.

Your path to homeownership starts with the right information and a plan that fits your goals.