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.