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 FHA limit: $764,750 for a one-unit home in 2026 (higher for multi-unit)
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
Depending on the active program and borrower eligibility, assistance may cover part or all of the required down payment. Income limits and repayment terms apply, so the current CalHFA rules must be verified before relying on assistance.
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 - the current limit depends on household size, location, and applicable USDA deductions
- 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.