Everything Your Bank Won't Tell You About CA Mortgages in 2026

FHA. Conventional. USDA. ADU financing. 6 programs most first-time buyers never hear about. Here's the math on all of them — free.

FHA

FHA Loan — Best for credit scores 580-669

3.5% down. Rates competitive with conventional. Mortgage insurance (MIP) required for life of loan if you put down less than 10%. For buyers with credit challenges who can show 12 months of on-time rent payments — this is often the fastest path.

Conventional

Conventional — Best for credit 670+, 5% down

PMI drops off at 20% equity (vs. FHA MIP for life). On a $500K home with 5% down, PMI costs $150-250/month. The moment you hit 20% equity — PMI disappears automatically. Conventional also has HomeReady and Home Possible: 3% down, income limits by county.

USDA

USDA Loan — $0 down in qualifying CA rural zones

No money down. 30-year fixed. Income limits apply (typically $100K/year for household in CA). Some parts of Riverside County, eastern LA County, and inland San Bernardino qualify. This is the most underused first-time program in California.

CA Dream

CA Dream for All — Up to $150K in down payment assistance

The California Housing Finance Agency (CalHFA) offers up to 5% in down payment assistance as a second mortgage — 0% interest, $0 payments for 30 years. On a $600K home that's up to $30,000 you never have to repay out of pocket. Current status: waitlist open — we're monitoring it weekly.

ADU Financing

ADU/JADU Financing — California's unique opportunity

California is the only state with dedicated ADU financing programs. You can finance the main house + the ADU in one loan (purchase + construction). On a $650K property with a $150K ADU addition, that's one mortgage, one lender, one payment. If you're buying with the intent to add an ADU and rent it, this changes the entire math.

VA Loan — For veterans, 0% down

For eligible veterans: 0% down, no PMI, competitive rates. Funding fee can be rolled into the loan. In some CA markets (especially Riverside/San Bernardino), VA loans are the most competitive offer a veteran buyer can make — sellers know VA deals close reliably.

Real Buyers. Real Rates. Real Wins.

These are real CA buyers from the last 90 days:

4.875% Temecula buyer — $480K — FHA — 3.5% down

5.25% Murrieta first-timer — $395K — Conventional + CalHFA DPA

6.375% SW Riverside move-up — $620K — Conventional — 20% down

Rates as of May 2026. Your rate depends on credit, income, property, and current market conditions.

Run Your Numbers — All 6 Programs

Text FIRST to (951) 517-4432 with your estimated home price and income.
I'll send back a comparison of all programs you likely qualify for.
Free. No credit pull. 15-minute analysis.

Nick Nagy | NMLS 314880 | Xpert Home Lending

Text FIRST → 951-517-4432

Nick Nagy | Xpert Home Lending | NMLS 314880 | CA DRE 01444600 | Equal Housing Opportunity
Programs listed are subject to change. Income limits, property eligibility, and interest rates vary by individual circumstance. Not all buyers will qualify for all programs. This is general information only — consult a licensed loan officer for your specific situation.