California Mortgage & Home Loan Guide (2025)
Your Complete Resource for California Home Financing
Quick Answer: California homebuyers typically choose between conventional loans, FHA loans, VA loans, and jumbo loans depending on property price, credit profile, and down payment availability. With county loan limits ranging from $806,500 to over $1.2 million in high-cost areas, understanding California-specific requirements is essential for successful home financing.
Why California Mortgages Are Different
California's housing market presents unique challenges and opportunities that distinguish it from other states:
Higher Home Prices
The median California home price exceeds $800,000 in many markets, requiring specialized loan products and larger down payments than most other states.
County-Specific Loan Limits
California has some of the highest conforming loan limits in the nation. Counties like San Francisco, San Mateo, and Orange County have limits exceeding $1.1 million, while inland counties use the baseline $806,500 limit.
Jumbo Loan Prevalence
Nearly 40% of California mortgages are jumbo loans—loans exceeding conforming limits—compared to less than 10% nationally.
Down Payment Assistance
California offers multiple state-funded programs including CalHFA, MyHome Assistance, and ZIP (Zero Interest Program) to help first-time and moderate-income buyers.
Property Tax Structures
Proposition 13 caps property tax increases at 2% annually, but new purchases are assessed at current market value. Mello-Roos taxes in newer developments can add significant costs.
California Mortgage Rates: What to Expect
California mortgage rates closely follow national trends but can vary based on loan type, county, and property specifics.
Current Rate Ranges (2025)
| Loan Type | Average Rate Range |
|---|---|
| Conventional 30-year fixed | 6.25% - 7.25% |
| FHA 30-year fixed | 6.00% - 7.00% |
| VA 30-year fixed | 5.75% - 6.75% |
| Jumbo 30-year fixed | 6.50% - 7.50% |
| 15-year fixed | 5.50% - 6.50% |
Note: Rates are for informational purposes and should be verified with a licensed professional.
California Loan Types: Which Is Right for You?
Conventional Mortgages
Best for buyers with strong credit (680+) and down payments of 5-20%.
Key Features:
- High-balance loans up to $1,149,825 in expensive counties.
- Lower rates than jumbo loans when within limits.
- PMI can be removed once reaching 20% equity.
FHA Loans
Popular with first-time buyers with limited down payment funds and credit scores from 580-680.
Key Features:
- Minimum 3.5% down payment.
- Credit scores as low as 580 accepted.
- More lenient debt-to-income ratios.
VA Loans
For eligible veterans, active-duty service members, and qualifying spouses.
Key Features:
- 0% down payment required.
- No monthly mortgage insurance (PMI).
- Competitive interest rates.
Jumbo Loans
Required for homes priced above county conforming limits ($806,500-$1,149,825+).
Key Features:
- Typically require 10-20% down payment.
- Credit score of 700-720+ needed.
- Requires significant cash reserves.
Reverse Mortgages (HECM)
For California homeowners age 62+ seeking to convert home equity into income.
Key Features:
- Converts home equity into tax-free cash.
- No monthly mortgage payments required.
- Borrower retains home ownership.
California County Loan Limits (2025)
Understanding your county's conforming loan limit is critical for determining whether you need a jumbo loan.
| High-Cost Counties (Partial List) | Limit |
|---|---|
| San Francisco, San Mateo, Santa Clara, Orange, Marin | $1,149,825 |
| Los Angeles, San Diego, Ventura, Santa Barbara, Alameda | $1,004,000 - $1,149,825 |
| Standard Limit Counties (Partial List) | Limit |
|---|---|
| Sacramento, Fresno, Kern, San Joaquin, Riverside | $806,500 |
California Mortgage FAQs
What credit score do I need for a California mortgage?
Minimum scores vary: FHA allows 580 (or 500 with 10% down), VA typically requires 620+, conventional needs 620+ (680+ for best rates), and jumbo loans usually require 700+. Lenders often prefer scores higher than the minimums in competitive markets.
Do I need 20% down in California?
No. FHA loans require 3.5% down, conventional loans allow 3-5% down, and VA loans require 0% down. However, higher down payments reduce costs and can make your offer more competitive. Jumbo loans typically require 10-20% down.
What is Mello-Roos and how does it affect my payment?
Mello-Roos is a special tax assessment for infrastructure in newer California communities. It can add $200-$1,000+ monthly to housing costs and must be disclosed during purchase. These assessments typically last 20-40 years and don't increase with property value like regular taxes.
Can self-employed buyers get mortgages in California?
Yes, but documentation is more extensive, usually requiring 2 years of tax returns and profit/loss statements. Bank statement loans (non-QM) are available for those who can't document income traditionally, though rates are higher.
Explore Popular California Markets
Los Angeles County
Orange County
San Diego County
California Mortgage Calculators
Get personalized estimates for your California home purchase or refinance:
About This Guide
Mardisen provides comprehensive, unbiased mortgage information and calculators to help California homebuyers and homeowners make informed decisions. We are not a lender or mortgage broker—we're an independent educational resource. All rate information and loan details are for informational purposes only and should be verified with licensed mortgage professionals. This information is provided for educational purposes. Consult with licensed mortgage professionals before making financial decisions.