First-time home buyer loans in Sacramento — every program compared.
Sacramento has more first-time buyer loan options than most markets — FHA, CalHFA, conventional 3% down, VA, USDA, and several stackable down payment assistance programs. Here's how each one actually works, who they fit, and how to combine them for the lowest cash-to-close.
- Who counts as a first-time buyer?
- FHA — the default starting point
- CalHFA — California's down payment assistance
- Conventional 3% down — Fannie/Freddie programs
- VA — for eligible veterans and active duty
- USDA — $0 down in eligible Sacramento-area zip codes
- How to stack programs for the lowest cash-to-close
Who counts as a first-time buyer?
The federal definition is anyone who hasn't owned a primary residence in the last 3 years. That includes:
- People who've never owned a home
- People who owned a home but sold it more than 3 years ago
- Recently divorced borrowers who jointly owned but no longer have ownership
- Owners of investment property only (never a primary residence)
Most first-time buyer programs use this definition, including CalHFA. A few specifically require you to have never owned — those are rarer and called out below.
FHA — the default starting point
FHA is the most common loan for first-time Sacramento buyers because the requirements stretch the furthest:
- 3.5% down with a 580+ credit score
- DTI up to 56.9% — much higher than conventional
- Family gift funds can cover the entire down payment
- Sacramento County limit: $766,550 in 2025
Tradeoff: FHA mortgage insurance (MIP) stays for the life of the loan with less than 10% down. The standard plan is to refinance to conventional once you've built ~20% equity, usually 4–7 years in.
CalHFA — California's down payment assistance
CalHFA is a state-funded program designed for low-to-moderate income first-time buyers. The two key pieces:
- CalHFA first mortgage — typically an FHA or conventional first, originated through approved lenders
- MyHome Assistance Program — silent second loan covering up to 3.5% (FHA) or 3% (conventional) of the purchase price, used for down payment or closing costs
In practice, this stack means many CalHFA buyers in Sacramento close with $0 of their own money toward the down payment. Income limits apply — in Sacramento County, roughly $235K household income for a moderate-income CalHFA program in 2025, lower for the low-income tier.
Conventional 3% down — Fannie/Freddie programs
Conventional doesn't require 20% down. Fannie Mae's HomeReady and Freddie Mac's Home Possible both allow 3% down for first-time buyers under area median income limits:
- 3% down with 620+ credit score
- Reduced PMI compared to standard conventional
- PMI drops off at 78% LTV automatically (unlike FHA's lifetime MIP)
- Income limits: typically 80% of area median income for the strongest pricing
Best fit: strong credit (680+) and income that fits the AMI cap. Long-term cheaper than FHA because PMI eventually goes away.
VA — for eligible veterans and active duty
Hands down the best loan in the market for buyers who qualify:
- $0 down with full entitlement — no loan limit
- No PMI ever
- Flexible credit — most lenders down to 580
- Funding fee waived for veterans with service-connected disability ratings
Sacramento has a large veteran population, especially around McClellan and Beale AFB. Even as a first-time buyer, the VA loan beats FHA on monthly payment in almost every scenario.
USDA — $0 down in eligible Sacramento-area zip codes
USDA Rural Development loans require $0 down in designated areas. Around Sacramento, eligible zones include Galt, Wilton, Herald, Elverta, Sloughhouse, parts of Lincoln, Loomis, and most foothill communities.
- $0 down, 100% financing
- Income capped — roughly $128,250 for a 1–4 person household in Sacramento County (2025)
- Lower mortgage insurance than FHA — 0.35% annual fee vs FHA's 0.55%
If you're open to Galt, Wilton, or the foothills, USDA is often the cheapest monthly payment available.
How to stack programs for the lowest cash-to-close
The strongest first-time buyer combinations I see in Sacramento:
- FHA + CalHFA MyHome — FHA first mortgage, MyHome covers the 3.5% down. Add a seller credit toward closing costs and many buyers close with $5K–8K total.
- Conventional HomeReady + GSFA Platinum — 3% down conventional with grant-based DPA covering down payment and closing.
- VA + seller credit — $0 down, seller covers up to 4% in closing concessions, buyer closes with prepaid taxes/insurance only.
- USDA + seller credit — $0 down in eligible zip codes, seller credit handles closing costs.
The right stack depends on your credit, income, and target neighborhood. A 15-minute call is usually enough to map your best three options.
Frequently asked questions
What's the lowest down payment I can put on a Sacramento home as a first-time buyer?+
$0 if you qualify for VA or USDA. 3% on conventional HomeReady/Home Possible. 3.5% on FHA. Add CalHFA MyHome and the down payment is often fully covered.
What credit score do I need as a first-time buyer in Sacramento?+
580 minimum for FHA at 3.5% down, 620+ for conventional 3% down, 580+ for VA (lender dependent). The best pricing kicks in at 720+ on conventional and 680+ on FHA.
Are first-time buyer programs only for people who've never owned?+
No. Most define 'first-time buyer' as not having owned a primary residence in the last 3 years. Previous investment property owners and recently divorced borrowers often still qualify.
Can I use CalHFA more than once?+
CalHFA is designed for first-time buyers, but a few programs allow repeat buyers in targeted census tracts. We'd check your specific situation against current program rules.
Do first-time buyer programs cost more in fees or have higher rates?+
Usually no. CalHFA rates are competitive with standard FHA/conventional. The MyHome silent second carries a small interest rate but no monthly payment — it's repaid at sale, refinance, or end of term.