FHA loan requirements in California — what actually qualifies you in 2025.
FHA loans are the most common path for first-time California buyers — 3.5% down, flexible credit, and forgiving debt-to-income limits. Here are the real requirements, what underwriters actually look at, and the California-specific limits that decide what you can buy.
Credit score: 580 FICO for 3.5% down
FHA's published minimum is 500 FICO, but here's how it works in practice in California:
- 580+ — 3.5% minimum down payment. This is the standard FHA loan.
- 500–579 — 10% minimum down payment required.
- Under 500 — not FHA-eligible.
Most California lenders set their own overlay at 620 FICO to keep files clean through automated underwriting (DU/LP). Below 620, expect a manual underwrite — slower, more documentation, and tighter DTI limits. If your score sits at 590–615, a 30-day credit cleanup before applying often saves weeks on the back end.
Down payment: 3.5% — gift funds allowed
The 3.5% minimum can come from:
- Your own savings, checking, or investment accounts (sourced and seasoned 60 days)
- Gift funds from a family member — 100% of the down payment can be gifted
- Down payment assistance programs like CalHFA MyHome (stacked on top of FHA)
- Documented sale of personal assets (with paper trail)
On a $500,000 California home, that's $17,500 down. The seller can also contribute up to 6% of the purchase price toward your closing costs, which significantly lowers your cash-to-close.
Debt-to-income: up to 56.9% with strong file
FHA is more forgiving than conventional on DTI:
- Front-end (housing only): typically up to 31% of gross monthly income
- Back-end (total debt): 43% standard, up to 56.9% with compensating factors
Compensating factors that push DTI higher: reserves of 3+ months PITI, minimal payment shock vs. current rent, residual income after expenses, and a 680+ credit score. Student loan payments use 0.5% of the balance if you're on income-driven repayment — a frequent dealbreaker on conventional that FHA handles better.
California FHA loan limits (2025)
FHA limits are set county-by-county based on local home prices. 2025 single-family limits in major California metros:
- Sacramento, Placer, El Dorado, Yolo Counties: $766,550
- Los Angeles, Orange County: $1,209,750
- San Diego County: $1,077,550
- San Francisco, San Mateo, Santa Clara: $1,209,750
- Most rural CA counties: $524,225 (national floor)
Above the FHA limit you'd shift to a conventional or jumbo loan. Multi-unit limits (2–4 units) are higher in every county.
Property requirements: the FHA appraisal
FHA appraisers check for Minimum Property Requirements (MPRs) — safety, soundness, and security. Common items flagged in California:
- Peeling paint on homes built before 1978 (lead-based paint concern)
- Missing handrails on stairs of three or more steps
- Broken windows, exposed wiring, or active roof leaks
- Non-functional appliances that come with the sale
- Septic or well systems that haven't been inspected
Cosmetic issues (paint colors, dated cabinets, carpet) don't matter. Required repairs typically need to be completed before close — sometimes the seller fixes them, sometimes you negotiate a credit and handle them after, depending on the issue.
FHA mortgage insurance (MIP)
FHA loans carry two mortgage insurance premiums:
- Upfront MIP: 1.75% of the loan amount, financed into the loan (not paid in cash)
- Annual MIP: approximately 0.55% of the loan amount, paid monthly
On loans with less than 10% down, MIP stays for the life of the loan. The standard exit is refinancing to conventional once you've built ~20% equity — usually 4–7 years in, depending on appreciation. With 10%+ down, MIP drops off after 11 years.
Employment and income documentation
FHA wants to see a 2-year employment history, though gaps are workable. Typical documents:
- Most recent 30 days of pay stubs
- Last 2 years of W-2s
- Last 2 years of federal tax returns (required for self-employed, often requested for W-2 too)
- Most recent 2 months of bank/asset statements (all pages)
- Photo ID and Social Security number
Self-employed buyers need 2 years of returns and a year-to-date profit & loss. Bonus and commission income generally needs a 2-year history to count. Gift funds need a signed gift letter and a paper trail showing the funds leaving the donor's account and arriving in yours.
Frequently asked questions
Can I get an FHA loan with a 580 credit score in California?+
Yes — 580 is the FHA floor for 3.5% down. Most California lenders prefer 620+ for a clean automated approval, but 580–619 still works with manual underwriting and stronger compensating factors.
What's the FHA loan limit in my California county?+
It varies by county based on local home prices. Sacramento, Placer, El Dorado, and Yolo are at $766,550 in 2025. LA, Orange, San Diego, and the Bay Area are over $1M. Send me your target city and I'll confirm the exact limit.
How long do I have to wait after a bankruptcy or foreclosure to get an FHA loan?+
Chapter 7 bankruptcy: 2 years from discharge. Chapter 13: 1 year of on-time payments while still in the plan, with court approval. Foreclosure or short sale: 3 years. Re-established credit during the waiting period helps a lot.
Can I combine FHA with CalHFA down payment assistance?+
Yes — this is one of the most common California first-time buyer combinations. CalHFA's MyHome program can cover up to 3.5% of the purchase price, often eliminating the FHA down payment entirely.
Does FHA work for condos in California?+
Only if the condo project is on the FHA-approved list. Many California condos qualify, but a meaningful number don't. Always check before writing an offer.