Ryan Van Til
Mortgage Advisor, NMLS #02336853 | Pacific Trust Mortgage
San Diego is one of the most desirable places to live in California, and buying your first home here is a major milestone. With median prices hovering around $900,000 to $950,000 countywide, it can feel out of reach. But first-time buyers have more options than most people realize. Low down payment programs, local assistance grants, and competitive rates through wholesale lenders can make homeownership far more accessible than you might think.
I work with first-time buyers in San Diego every week, and the questions below are the ones I hear most often. This guide answers each one with the specifics that matter for San Diego County.
3%
Down. Conventional
3.5%
Down. FHA
0%
Down. VA
580+
FHA Credit Score
Yes
DPA Available
How much do first-time buyers need for a down payment in San Diego?
The biggest misconception about buying a home is that you need 20% down. In San Diego, where a starter home in neighborhoods like Clairemont, Mira Mesa, or Chula Vista can run $650,000 to $800,000, that would mean saving $130,000 to $160,000. Very few first-time buyers have that kind of cash, and the good news is you do not need it.
Conventional: 3% Down
Programs like Fannie Mae HomeReady and Freddie Mac Home Possible allow as little as 3% down for first-time buyers. On a $700,000 home, that is $21,000. You will pay private mortgage insurance (PMI) until you reach 20% equity, but PMI drops off automatically once you hit that threshold.
FHA: 3.5% Down
FHA loans are the most popular choice for San Diego first-time buyers with credit scores between 580 and 700. The 2026 FHA loan limit for San Diego County is $1,006,250, which covers the vast majority of homes. Down payment on a $700,000 home would be $24,500.
VA: 0% Down
San Diego has one of the largest military populations in the country. If you are active duty, a veteran, or a surviving spouse, a VA loan lets you buy with zero down payment and no monthly mortgage insurance. With bases like Camp Pendleton, MCAS Miramar, and Naval Base San Diego, many first-time buyers here qualify.
What credit score do I need to buy my first home?
Your credit score determines which loan programs you qualify for and what interest rate you will pay. Here is the breakdown:
580 to 619: FHA is your primary option. Expect slightly higher rates but you can still qualify for 3.5% down.
620 to 679: Conventional loans become available. FHA may still offer better terms depending on your full profile.
680 to 719: Solid range. Conventional usually wins here with competitive rates and PMI that can be removed later.
720+: Best rates available. You will qualify for the lowest PMI costs and the most competitive pricing.
Pro Tip
If your score is close to a tier boundary (say 615 or 675), it can be worth spending a few weeks improving it before applying. Even a 20-point increase can mean a noticeably better rate. I can pull a soft credit check and give you specific steps to boost your score. No cost and no impact to your credit.
FHA vs conventional: which is better for first-time buyers?
This is the question I get asked more than any other. The short answer: it depends on your credit score and how long you plan to stay in the home. Here is a side-by-side comparison:
| Feature | FHA | Conventional |
|---|---|---|
| Minimum Down Payment | 3.5% | 3% |
| Minimum Credit Score | 580 | 620 |
| Mortgage Insurance | MIP for life of loan (< 10% down) | PMI drops at 80% equity |
| Max DTI | Up to 55% | Up to 50% |
| 2026 SD County Limit | $1,006,250 | $1,006,250 (conforming) |
| Upfront Fee | 1.75% UFMIP (can be financed) | None |
| Best For | Scores 580-679, limited savings | Scores 700+, long-term hold |
One important note for San Diego: with the high conforming loan limit of $1,006,250, both FHA and conventional cover most homes in the county. You do not need to worry about jumbo pricing unless you are looking at properties above that threshold.
What down payment assistance programs are available in San Diego?
San Diego has several programs designed specifically to help first-time buyers with their down payment and closing costs:
CalHFA MyHome Assistance Program
Provides a deferred-payment junior loan of up to 3.5% of the purchase price (or appraised value, whichever is lower). No monthly payments. The loan is repaid when you sell, refinance, or pay off the first mortgage. Must be paired with a CalHFA first mortgage.
CalHFA ZIP (Zero Interest Program)
A zero-interest, silent second loan of up to 3% of the first mortgage amount. Like MyHome, it is deferred until you sell, refi, or pay off the first mortgage. Can be layered with MyHome for up to 6.5% in combined assistance.
San Diego Housing Commission (SDHC) Programs
SDHC offers closing cost and down payment assistance for low- and moderate-income buyers in the City of San Diego. Program availability and funding levels vary year to year, so it is worth checking current availability when you are ready to buy.
Lender-Specific DPA
Some wholesale lenders offer their own DPA programs with grants of $5,000 to $15,000 that do not need to be repaid. I have access to 50+ lenders and can compare which DPA programs you qualify for based on your income, location, and loan type.
Should I get pre-approved before house hunting?
Yes, and in San Diego, this is not optional. The San Diego market is competitive, especially for homes under $800,000 where first-time buyers are most active. Listing agents routinely ask for a pre-approval letter with any offer, and many will not present offers without one.
A pre-approval involves submitting your income documentation, tax returns, bank statements, and running a credit check. From there, the lender confirms how much you can borrow and issues a letter you can submit with your offer. The process typically takes one to three business days.
Why Pre-Approval Matters in San Diego
In neighborhoods like North Park, Hillcrest, and Pacific Beach, well-priced homes can receive multiple offers within days. A strong pre-approval letter from a reputable lender can be the difference between winning and losing a bidding situation. Sellers want certainty that the buyer can close, and a pre-approval provides that confidence.
How much house can a first-time buyer afford in San Diego?
Affordability in San Diego depends on your income, debts, down payment, and the interest rate you qualify for. As a general rule, lenders want your total housing payment (principal, interest, taxes, insurance, and any HOA dues) to stay below about 40% to 45% of your gross monthly income.
Here are some rough guidelines for San Diego in 2026:
$100K household income can typically support $450K to $550K
$130K household income can typically support $600K to $700K
$160K household income can typically support $750K to $850K
$200K+ household income can typically support $900K+
For first-time buyers priced out of central San Diego, areas like Chula Vista, El Cajon, Lemon Grove, Spring Valley, and Imperial Beach offer more affordable options while still being within a reasonable commute. Condos and townhomes in these areas often start in the $450,000 to $600,000 range.
What are closing costs for first-time buyers?
Closing costs are the fees paid at the close of escrow, separate from your down payment. In San Diego, plan for 2% to 3% of the purchase price. On a $700,000 home, that is roughly $14,000 to $21,000.
Common closing costs include:
Lender origination and processing fees
Appraisal fee ($500 to $800)
Title insurance and escrow fees
Recording fees (San Diego County)
Prepaid property taxes and homeowners insurance
Home inspection ($400 to $600, paid before closing)
There are ways to reduce your out-of-pocket closing costs. You can negotiate seller credits (the seller pays a portion of your closing costs), opt for a lender credit in exchange for a slightly higher rate, or use a DPA program that includes closing cost assistance.
What Is the Minimum Down Payment for a First-Time Buyer in San Diego?
The minimum down payment is 3% on a conventional loan, 3.5% on an FHA loan, or 0% with a VA loan. On a $700,000 home, that translates to $21,000 for conventional, $24,500 for FHA, or nothing down if you are VA-eligible.
The 3% conventional option is available through Fannie Mae HomeReady and Freddie Mac Home Possible programs, both of which are specifically designed for first-time buyers. You will pay private mortgage insurance (PMI) with less than 20% down, but the PMI drops off automatically once you reach 20% equity through payments or appreciation. In San Diego, where home values have historically appreciated well, hitting that 20% mark often happens sooner than you would expect.
FHA at 3.5% down is the go-to option if your credit score is between 580 and 679. The trade-off is that FHA mortgage insurance (MIP) stays on the loan for life if you put less than 10% down. That said, many first-time buyers start with FHA and refinance into a conventional loan once their credit improves or their equity builds to 20%. With the San Diego County FHA limit at $1,006,250 for 2026, FHA covers the vast majority of starter homes in the area.
Do not forget about down payment assistance. Programs like CalHFA MyHome (up to 3.5% of the purchase price) and CalHFA ZIP (up to 3% of the loan amount) can be combined to cover most or all of your down payment. The San Diego Housing Commission also offers grants for income-qualified buyers. I help first-time buyers layer these programs to minimize out-of-pocket costs every week.
How Long Does It Take to Close on a House in San Diego?
Expect 25 to 35 days from accepted offer to closing, depending on your loan type. Conventional loans tend to close on the faster end at 25 to 30 days. FHA and VA loans average 30 to 35 days due to additional appraisal and documentation requirements.
Here is what drives the timeline. Within the first few days after your offer is accepted, your lender orders the appraisal and begins processing your file. The appraisal in San Diego County typically takes 5 to 10 business days. Once the appraisal comes back and your file is complete, it goes to underwriting for review, which takes 2 to 5 business days. If conditions come back (which they almost always do), you clear those, the loan gets final approval, and then closing documents are drawn and sent to the title company or escrow office.
The number one thing that slows down closings is missing or delayed documentation from the borrower. If your lender asks for a pay stub, bank statement, or letter of explanation, get it back the same day. Every day you sit on a request is a day added to your timeline. I tell every first-time buyer: check your email and your Floify portal at least once a day during the process. Being responsive is the single biggest thing you can control.
For first-time buyers in San Diego competing in multiple-offer situations, a 25-day close on conventional can make your offer more attractive to sellers compared to a buyer asking for 45 days. Speed signals confidence, and that matters when a seller is choosing between similar offers.
Should I Get Pre-Approved Before Looking at Houses?
Yes, always. In San Diego, getting pre-approved before you start house hunting is not just a good idea, it is basically required. Most listing agents in the county will not even present an offer to their seller without a pre-approval letter attached.
A pre-approval does three things for you. First, it tells you exactly how much you can borrow, so you are not wasting time looking at homes outside your range. Second, it locks in your interest rate for 60 to 90 days, protecting you from rate increases while you shop. Third, it surfaces any issues with your credit, income documentation, or assets before you find the house you love. The last thing you want is to fall in love with a home, submit an offer, and then find out you cannot get approved because of something that could have been fixed weeks earlier.
The pre-approval process takes one to three business days. You will need your last two pay stubs, last two months of bank statements, your most recent W-2s or tax returns, and a valid ID. I pull a credit report (hard inquiry, which does have a small impact on your score) and run your full file through automated underwriting. Once approved, you get a letter you can submit with any offer.
One more thing: there is a difference between pre-qualification and pre-approval. A pre-qualification is a rough estimate based on what you tell the lender verbally. A pre-approval is based on verified documents and an actual credit pull. In San Diego's competitive market, a pre-qualification letter will not carry the same weight. Sellers and their agents know the difference, and a fully underwritten pre-approval shows you are serious and ready to close.