California Loan Programs Explained: A Guide to Conventional, FHA, VA, and Jumbo Loans

Buying a home in California isn't just about finding the right property, but also choosing the lending path that best positions you for long‑term financial success. With home prices among the highest in the nation, understanding how different mortgage programs work, from conventional loans to government‑backed options and jumbo financing, can be the difference between a seamless transaction and costly surprises.

California's real estate market spans a broad spectrum of price points, from starter homes in inland cities to gated luxury estates, high-end condos, and lavish coastal compounds. The type of loan you choose affects everything from your down‑payment requirements and interest rates to monthly payments and eligibility criteria.

Importantly, mortgage programs are not one‑size‑fits‑all; picking the right one requires aligning your financial profile, long‑term goals, and the realities of California home values with available loan structures.

This guide breaks down the most common mortgage types available to California buyers, how they differ, and where each stands in the context of the state's unique market dynamics.

Conventional mortgages are the most common financing option for buyers across California. They are not insured or guaranteed by the government, meaning private lenders set underwriting standards and pricing. These loans can be conforming, meeting the purchase limits and criteria for government-backed Fannie Mae and Freddie Mac mortgage companies, or non‑conforming, such as jumbo loans that exceed the standards set by the Federal Housing Finance Agency (FHFA).

• Available as fixed‑rate or adjustable‑rate mortgages (ARMs)
• Typically requires a minimum credit score in the 620+ range for competitive pricing 
• Down payment minimums often start around 5%, with the possibility of lower down payments for first‑time buyers in some programs
• Borrowers with less than 20% down usually pay private mortgage insurance (PMI) until sufficient equity is reached

Conventional loans fit well for buyers with strong credit and stable finances who want predictable payments and flexible loan terms. They're especially attractive when market conditions offer competitive interest rates and low PMI costs relative to other programs.

Federal Housing Administration (FHA) loans are government‑insured mortgages that help borrowers who might not qualify for conventional financing. Because the FHA backs the loan, lenders take on less risk, which translates into lower qualification thresholds for borrowers.

• Low down payment options — as little as 3.5% of the purchase price 
• More lenient credit requirements, sometimes allowing scores that wouldn't meet conventional standards 
• Borrowers with modest incomes or limited savings — common among first‑time buyers in high‑cost markets — may find FHA particularly accessible

FHA loans do carry mortgage insurance premiums (MIP), which can affect monthly payments and remain in place for years, depending on the loan structure. In California's competitive market, FHA remains a reliable option for buyers who prioritize initial accessibility over longer‑term payment savings.

The U.S. Department of Veterans Affairs backs VA loans and offers one of the most borrower‑friendly home financing options available for military service members, veterans, and eligible spouses.

• No down payment requirement in most cases 
• Competitive interest rates
• No requirement for PMI
• Flexible credit standards relative to conventional loans

In markets like San Diego, Sacramento, and the Central Coast — where military families and veterans are substantial homebuyer segments, VA loans can unlock homeownership without the upfront cash barrier that often accompanies conventional financing.

California's high median home prices often mean buyers need loan amounts that exceed conforming loan limits, especially in areas like the Bay Area, Malibu, or La Jolla. That's where jumbo loans come into play.

What Makes a Loan "Jumbo"?

A jumbo mortgage finances an amount above the conforming limits set by the FHFA. For 2026, those limits are:

• $832,750 for the majority of inland and far northern California
• $897,000 for Sonoma County
• $941,850 for Santa Barbara County
• $994,750 for Monterey County
• $1,000,500 for San Luis Obispo County
• $1,017,750 for Napa County
• $1,035,000 for Ventura County
• $1,104,000 for San Diego County
• $1,249,125 for the counties of Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Mateo, Santa Clara, Santa Cruz, and San Francisco

Anything above these thresholds is considered a jumbo loan.

• Typically associated with larger loan balances, reflecting higher property values
• May carry higher interest rates and stricter underwriting standards due to increased lender risk 
• Often require larger down payments and stronger credit profiles
• Available in both fixed and adjustable‑rate structures, with terms up to 30 years

Today's jumbo products may offer more flexibility around down payments than in the past, including some programs that start as low as from 5% to 10% down. Even then, they still generally demand robust financial strength and reserves.

While often overlooked in coastal urban markets, USDA loans are those backed by the U.S. Department of Agriculture. A powerful tool for California buyers seeking affordability in eligible rural and suburban areas, USDA loans aren't limited to agricultural properties or farmland

Instead, they're designed to support homeownership in lower-density, moderate-income communities, many of which are found in counties bordering those with higher-set conforming loan limits.

• 0% down payment required — one of the few remaining true zero-down options
• Competitive interest rates
• Reduced mortgage insurance premiums compared to FHA
• Available only for primary residences
• Household income limits apply and vary by region and family size

For buyers priced out of core urban markets, USDA loans offer a path to ownership without significant upfront capital. In communities just outside metro cores—such as inland Central Valley cities or foothill towns east of Sacramento—these loans provide flexibility for first-time buyers and relocating families alike.

Selecting the right mortgage program in California hinges on balancing financial readiness with long‑term goals. Such considerations also include deciding between fixed and adjustable rates, where the former's interest rate and monthly payment remain stable for the life of the loan. The latter offers a lower initial rate that can change over time in line with market indexes.

In California, 30‑year fixed-rate mortgages remain the most popular.

As each program carries its own qualification standards, costs, and strategic considerations, working with a trusted mortgage professional is paramount to aligning your financial strategy with the realities of California's housing market.

If you have questions about loan programs or are looking for more guidance on California real estate, contact Consumer's Title Company today. Our team's extensive experience and range of services across all 58 counties in California promise the support and guidance necessary to help you navigate your real estate journey.