The California mortgage market
Overview
California's mortgage market is shaped by some of the highest home prices in the country, with substantial variation between expensive coastal metros (San Francisco, Los Angeles, San Diego) and more affordable inland regions (Fresno, Bakersfield, Sacramento exurbs). The state has high-balance conforming limits in most populous counties, making jumbo financing less necessary than it would be at the standard $766,550 limit.
Property taxes in California are governed by Proposition 13, which caps annual increases in assessed value at 2%. This produces strong predictability for long-term homeowners but creates wide gaps between long-tenured and recent buyers in the same neighborhood. Mello-Roos special assessments add to property tax bills in many newer subdivisions, so always check the full tax estimate before assuming statewide averages.
California Housing Finance Agency (CalHFA) programs make below-market financing accessible for first-time buyers and moderate-income borrowers. Combined with FHA's high-cost limits and VA's no-down-payment benefit, California's affordability gap is narrower for qualified buyers than median home price alone suggests.
California loan programs & assistance
State-specific programs that layer with FHA, VA, USDA, and conventional financing.
Frequently asked questions
What is the conforming loan limit in California for 2026?+
The baseline conforming limit is $766,550 in most counties. High-cost counties including Los Angeles, San Francisco, San Diego, Orange, Alameda, Contra Costa, Marin, and several others have higher limits up to $1,149,825 for single-family homes. Multi-unit limits are higher still.
Does Proposition 13 affect my mortgage qualification?+
Proposition 13 doesn't affect mortgage qualification directly, but it affects your property tax estimate. New buyers pay tax based on the current purchase price, not the seller's assessed value. Lenders calculate PITI using the assessor's standard 1.1%–1.25% effective rate (including local levies), which can be meaningfully higher than the statewide baseline of 0.71%.
Can I get a CalHFA loan and an FHA loan at the same time?+
Yes. CalHFA's first-mortgage programs are layered on top of FHA, VA, USDA, or conventional financing. The CalHFA MyHome Assistance or ZIP programs provide secondary financing for down payment and closing costs while a primary lender (often the same or a partner) handles the first mortgage.
How do California's high home prices affect down payment requirements?+
On expensive California homes, even an FHA 3.5% down payment can be $25,000–$40,000 in cash. This is why down-payment assistance programs are especially valuable in California. Many buyers use a combination of FHA financing, CalHFA junior loans, and gift funds from family to bridge the gap.