California First-Time Home Buyer Guide

CalHFA counts you as a first-time buyer if you haven't owned a principal residence in the past 3 years — prior owners can re-qualify. You must occupy the new home within 60 days of closing, and the requirement is waived entirely on CalHFA first mortgages used without down payment assistance.

Since 2021, a child who inherits a parent's home keeps the low Prop 13 assessed value only if the home was the parent's principal residence and the child moves in as their own principal residence within one year — otherwise it's reassessed to market value.

California's brackets run 1% to 12.3%, plus a 1% surcharge on income over $1 million, and the 1.3% state disability (SDI) tax now applies to all wages with no cap (2026 rate — it resets annually). Property tax and mortgage interest may be deductible, and Prop 13 caps assessed-value growth at 2% a year — confirm specifics with your tax professional.

The main routes are a home-equity line, a cash-out refinance, or a renovation loan that lends against the after-construction value — and FHA lets us count 75% of the ADU's projected rental income toward qualifying. The state's CalHFA ADU grant has been closed since December 2023 with no relaunch announced, so financing, not grants, is the current path.

Your property tax starts at 1% of your purchase price plus local voter-approved add-ons (typically landing near 1.1–1.25% total), and your assessed value can then rise no more than 2% per year while you own the home. The key point buyers miss: the home is reassessed to YOUR purchase price when it sells — the seller's low tax bill does not transfer to you.

A one-time bill that arrives roughly 6 to 18 months after closing, covering the difference between the seller's old assessed value and your purchase price for the rest of the fiscal year — often several thousand dollars, and it is typically not part of your lender escrow account. We flag the estimated amount at pre-approval so it never surprises you; close between January and May and you may receive two.

Yes — under Proposition 19, homeowners 55 and older, severely disabled homeowners, and wildfire or natural-disaster victims can transfer their existing assessed value to a replacement home anywhere in California, up to three times (unlimited for declared-disaster victims). If the new home costs more, only the difference in value is added to your transferred base.

A special tax on homes inside a Community Facilities District, typically running 20–40 years to repay bonds for local infrastructure — common in newer developments and often adding thousands per year on top of the base 1% tax. Sellers must disclose it with a Notice of Special Tax, and we count it in your qualifying ratios so your approval reflects the true monthly cost.

Owner-occupants can exempt $7,000 of assessed value on their principal residence — about $70 a year in savings — by filing a one-time form with the county assessor after closing. A 2025–26 bill to raise it for homeowners 62+ died in the Legislature, so $7,000 remains the figure as of July 2026.

Every county charges $1.10 per $1,000 of the price, customarily paid by the seller, and many cities stack their own transfer tax on top — San Francisco's is tiered from 0.5% up to 6% by price, and Los Angeles's Measure ULA adds 4% on sales at $5.4 million and above (5.5% at $10.9 million+, thresholds adjusting each July 1).

It's custom, not law, and it splits by region: in Southern California (LA, Orange, San Diego, Riverside, Ventura) the seller customarily pays for the owner's title policy, while in Northern California and the Bay Area the buyer typically pays. Escrow fees are usually split 50/50 — everything is negotiable in the purchase contract.

No — California is an escrow state: a licensed, neutral escrow officer handles the closing paperwork and funds, and attorneys aren't required the way they are in East Coast attorney-closing states. We coordinate directly with escrow from open to funding.

The 2026 baseline is $832,750, and high-cost counties — including Los Angeles, Orange, San Francisco, San Mateo, and Santa Clara — go up to $1,249,125 for a single-family home, and some counties, including San Diego, carry county-specific high-balance limits between the two — verify your county's current figure before you shop. A loan above your county's limit is a jumbo — it's the loan amount after your down payment that decides, not the price.

The FAIR Plan is California's insurer of last resort — basic named-peril fire coverage (no liability, theft, or water damage) when no regular carrier will write the home, covering dwellings up to $3 million as of January 2026. Lenders accept a FAIR Plan policy paired with a companion "difference in conditions" policy; we build the real premium into your qualification from day one.

Yes — insurance sits inside your monthly housing payment for debt-to-income purposes, and in higher-risk areas premiums can run several thousand dollars a year, directly reducing what you qualify for. We price insurance the same week you go under contract, with the real quote rather than a placeholder.

California is a community property state, so on FHA, VA, and USDA loans we must count a non-borrowing spouse's debts in your debt-to-income ratio even if they're not on the loan — though their credit score itself doesn't set your terms. On conventional loans a non-borrowing spouse's debts are excluded, which sometimes makes conventional the stronger fit for married buyers.

It can — SB 326 required condo HOAs to complete structural inspections of balconies and elevated walkways by January 1, 2026, and buildings with unfunded critical repairs can be ineligible for conventional financing under agency condo rules. We check the building's inspection and repair status early, because it determines which loan programs are available.

As little as 3% on a conventional loan or 3.5% on FHA, and $0 down on VA or USDA for eligible buyers, and CalHFA or GSFA down-payment assistance can cover much of it.

Generally 620 for conventional, 580 for FHA, and mid-600s (often 660 to 680) for CalHFA assistance programs, which also require a homebuyer education course.

MyHome is a deferred-payment second mortgage up to 3.5% of purchase price. Dream For All is a shared-appreciation program providing up to 20% down payment; borrower repays original DPA + a share of property appreciation at sale/refinance. Dream For All uses registration windows with randomized selection — the 2026 window closed March 16, and no new round is announced as of July 2026.

Generally no. You select one DPA program per transaction. Most California DPA programs don't combine with each other.

Yes — CalHFA programs have county-specific income limits. National programs (Chenoa, Arrive, Essex) typically have no income limits.

Yes, but purchase-price caps may not accommodate Bay Area or Los Angeles purchase prices. Higher-cost counties have higher caps but luxury segments still exceed program limits.