California Mortgage Guide 2026
This California mortgage guide covers everything you need to know about getting a mortgage in California — FHA loan limits by county, CalHFA assistance programs, property taxes under Proposition 13, closing costs, and the 2026 California housing market outlook.
California Loan Limits by County (2026)
California has some of the highest FHA and conforming loan limits in the country. Most of the state’s major metro counties qualify as high-cost areas, with limits well above the national floor of $524,225.
| County / Area | Conforming Limit | FHA Limit | Notes |
|---|---|---|---|
| Most inland counties (Fresno, Kern, Kings, etc.) | $806,500 | $524,225 | National floor |
| Sacramento / Placer / El Dorado | $806,500 | $763,600 | Above-floor tier |
| Riverside / San Bernardino | $806,500 | $644,000 | Inland Empire |
| San Diego County | $1,006,250 | $1,006,250 | High-cost |
| Los Angeles / Orange County | $1,149,825 | $1,149,825 | High-cost |
| Ventura County | $1,017,750 | $1,017,750 | High-cost |
| Santa Barbara County | $1,061,550 | $1,061,550 | High-cost |
| San Luis Obispo County | $911,950 | $911,950 | High-cost |
| Santa Cruz / Monterey | $1,149,825 | $1,149,825 | High-cost |
| Alameda / Contra Costa / Marin | $1,149,825 | $1,149,825 | Bay Area high-cost |
| San Francisco / San Mateo / Santa Clara | $1,209,750 | $1,209,750 | Highest in CA |
FHA loan limits vary significantly across California. With some of the highest-cost counties in the nation alongside more affordable inland areas, always verify your specific county at HUD’s official FHA limit lookup tool.
California Mortgage Guide: Loan Programs Available
| Program | Min Down Payment | Min Credit Score | Best For |
|---|---|---|---|
| FHA | 3.5% | 580 | First-time buyers, lower credit scores |
| VA | 0% | 580–620 (lender overlay) | Veterans, active duty, surviving spouses |
| USDA | 0% | 640 | Rural buyers meeting income limits |
| Conventional | 3–20% | 620 | Strong credit, wants PMI cancellation |
| CalHFA FHA | 3.5% | 660 | First-time buyers + DPA via CalHFA |
| CalHFA Conventional | 3% | 660 | Conventional with CalHFA MyHome DPA |
| CalHFA Dream For All | 0% (shared appreciation) | 660 | First-generation buyers, limited funds |
CalHFA Assistance Programs
The California Housing Finance Agency (CalHFA) administers the state’s primary homebuyer assistance programs. All CalHFA programs require using a CalHFA-approved lender and completing an 8-hour homebuyer education course.
| Program | Assistance Amount | Structure | Key Requirements |
|---|---|---|---|
| MyHome Assistance | Up to 3.5% of purchase price | Deferred second mortgage (due at sale/refi) | First-time buyer, income limits, CalHFA first mortgage required |
| Dream For All | Up to 20% of purchase price | Shared appreciation loan — repay % of appreciation at sale | First-generation homebuyer, lottery-based availability, income limits |
| CalHFA FHA + MyHome | 3.5% + up to 3.5% DPA | FHA first + deferred second | Min 660 credit, income limits, purchase price limits by county |
| CalHFA Conventional + MyHome | 3% + up to 3% DPA | Conventional first + deferred second | Min 660 credit, income limits apply |
Income limits matter. CalHFA income limits vary by county and household size. For most California counties, household income limits range from $180,000 to $300,000+ depending on area median income. Check CalHFA’s current income and purchase price limits at calhfa.ca.gov before applying.
California Property Taxes (Proposition 13)
California’s property tax system is governed by Proposition 13, passed in 1978. The base property tax rate is capped at 1% of assessed value, with additional local bond assessments that typically bring the effective rate to 1.1–1.4% of assessed value. The statewide average effective rate is approximately 0.71% due to the difference between assessed and market values for long-held properties.
Key rule: When you purchase a home in California, the property is reassessed at the purchase price. Your annual tax is based on that new assessed value, not prior owner’s value.
| Purchase Price | Est. Annual Tax (1.1% effective) | Monthly Escrow |
|---|---|---|
| $500,000 | ~$5,500 | ~$458/mo |
| $700,000 | ~$7,700 | ~$642/mo |
| $900,000 | ~$9,900 | ~$825/mo |
| $1,200,000 | ~$13,200 | ~$1,100/mo |
Annual assessed value increases are capped at 2% or the rate of inflation (whichever is lower) until the property is sold. Proposition 19 (effective 2021) significantly changed rules for parent-to-child property transfers — consult a tax professional if inheriting or gifting a California property.
Closing Costs in California
California buyer closing costs typically run 2%–3% of the purchase price. Unlike Florida, California has no mortgage tax or intangible tax — but buyers do pay documentary transfer tax (on the purchase, not the loan) and typically pay for title insurance in most counties.
| Fee | Rate / Amount | On a $700,000 Purchase |
|---|---|---|
| Documentary transfer tax (county) | $1.10 per $1,000 of value | $770 |
| City transfer tax (varies by city) | $0–$15+ per $1,000 (cities vary widely) | $0–$10,500+ |
| Title insurance (owner’s policy) | Based on purchase price | ~$2,500–$4,000 |
| Lender’s title insurance | Based on loan amount | ~$1,500–$2,500 |
| Escrow fee | Split 50/50 buyer/seller (customary) | ~$1,500–$2,500 buyer share |
| Loan origination fee | 0–1% of loan amount | $0–$5,600 |
City transfer tax note: Several California cities impose additional transfer taxes that can be substantial. San Francisco charges up to $15 per $1,000 on high-value properties. Always confirm city-specific transfer taxes with your escrow officer before closing.
California Housing Market Overview (2026)
California’s housing market remains among the most expensive in the nation. After a correction in 2022–2023, prices stabilized and have seen modest appreciation in 2024–2025 in most major metros. Limited inventory continues to support prices even as affordability remains a significant challenge.
| Area | Median Price (Est.) | Market Trend | Key Notes |
|---|---|---|---|
| San Francisco Bay Area | $1,200,000–$1,800,000+ | Recovering | Tech sector driving demand; high inventory in condos |
| Los Angeles Metro | $850,000–$1,100,000 | Stable | Wildfire risk in hillside areas affecting insurance |
| San Diego | $875,000–$1,050,000 | Strong | Military demand (VA loans dominant); limited inventory |
| Sacramento Metro | $520,000–$680,000 | Stable | More affordable; remote worker relocation destination |
| Riverside / San Bernardino | $490,000–$620,000 | Softening | Rate-sensitive; large FHA and VA market |
| Central Valley (Fresno, Bakersfield) | $320,000–$430,000 | Stable | Most affordable CA metro; USDA-adjacent rural areas |
| Orange County | $1,000,000–$1,400,000 | Stable | High jumbo demand; strong move-up market |
