The requirements to buy a house in California with an FHA or conventional loan are pretty standard. While it’ll depend on the type of home loan you get, you’ll need to have:
- A minimum credit score of 620
- A debt-to-income ratio (DTI) of less than 50%
- A down payment of at least 3%, depending on the home loan
You may be able to get an FHA loan with a credit score of 580; however, you’ll need to have a lower DTI.
Along with the above qualifications, you’ll also need to provide financial documentation, get an appraisal and pay closing costs.
Because California real estate is often so expensive, there’s a good chance you’ll need to purchase a home with a jumbo loan. These nonconforming home loans allow you to borrow more money than FHA and conventional loans allow.
The Federal Housing Finance Agency (FHFA) sets a limit for how much someone can borrow for government-backed loans. In 2022, this limit, known as a “conforming loan limit,” is set at $647,200 for a single-family home in most parts of the U.S.
However, because buying a house in California can be so costly, conforming loan limits are higher in some counties, including Los Angeles County and Orange County, where they reach the max loan limit for California – $970,800.
If you need to borrow more than the limit for your county, you’ll need to either pay the difference to get within the limit or get a jumbo loan. And since jumbo loans are regarded as riskier for the lender, expect to encounter stricter loan requirements. These will depend on your lender, but may include:
- A minimum credit score of 680 – 760 depending on your loan amount
- A DTI of 45% or lower
- A down payment of at least 10.01%
Along with these qualifications, you’ll also need to provide financial documentation, get an appraisal and pay closing costs and fees that will be higher than with a conforming home loan.