Current FHA guidelines, updated from one source.
This snapshot carries the FHA purchase parameters: the minimum required investment, the decision score that opens maximum financing, the upfront and annual mortgage insurance, and the manual qualifying ratios, each read from Lendmire’s guideline source.
Up to 96.5% loan-to-value on a purchase
3.5% of the purchase price or appraised value, whichever is lower, is the minimum investment on an FHA purchase; the loan covers the rest, up to 96.5% loan-to-value, and a gift may cover the whole investment.
Decision score for maximum financing
580 is the decision score for maximum financing, and the floor of the wholesale programs behind these pages; the decision score is the lowest of the borrowers’ middle scores, and a thin or non-traditional credit file can still qualify under manual underwriting.
Plus 0.50%–0.55% a year on most thirty-year loans
FHA mortgage insurance has two parts: 1.75% upfront, which is added to the loan, and an annual premium of 0.50%–0.55% on most thirty-year loans, charged monthly; the ladder below shows the schedule by loan size, leverage, and duration.
Housing and total debt, manual reference
31/43 is the starting point: the housing payment and the total debt as shares of effective income. Cash reserves, a minimal payment increase, or residual income stretch the ratios tier by tier, up to 40/50 with two factors.
| Decision score | Housing / total | Compensating factors |
|---|---|---|
| 500–579 or no credit score | 31% / 43% | not applicable — ratios may not exceed 31/43 (energy efficient homes 33/45) |
| 580 and above | 31% / 43% | no compensating factors required (energy efficient homes 33/45) |
| 580 and above | 37% / 47% | one of: verified and documented cash reserves; minimal increase in housing payment; residual income |
| 580 and above | 40% / 40% | no discretionary debt |
| 580 and above | 40% / 50% | two of: verified cash reserves; minimal increase in housing payment; significant additional income not reflected in effective income; residual income |
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV | 0.75% | mortgage term |
Refinances: rate-and-term to 97.75% loan-to-value on a home occupied for the past year; cash-out to 80% after twelve months of ownership and occupancy; streamline refinances of an existing FHA loan without an appraisal. Sellers and other interested parties may contribute up to 6% of the price toward closing costs; the entire minimum investment may be a gift.
Current FHA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · county loan limits apply — ask a Lendmire loan officer for the limit where you are buying · FHA loans are assumable · Lendmire is not affiliated with FHA or HUD.
For informational purposes only. This is not a commitment to lend or extend credit, an offer, or a quote. Program parameters shown are FHA guidelines and wholesale lender overlays, are subject to change without notice, and every figure depends on the borrower, the property, the selected program, and full underwriting. The rate, the payment, and any costs for a specific loan are provided in writing by a licensed loan officer. County loan limits apply and are confirmed by a loan officer. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government. Lendmire, LLC, NMLS #2371349. Equal Housing Opportunity.
What an FHA loan is — and how the file is qualified.
An FHA file in California is built from four pieces: the minimum required investment, the decision score, the mortgage insurance, and the qualifying ratios. Each has a rule, and each rule has a reason, which the cards below explain.
For the program overview, see Lendmire’s FHA loan program; for help with the minimum investment, the down payment assistance program.
The minimum required investment
The investment is calculated on the lesser of the purchase price and the appraised value, so a California home that appraises below the contract price raises the cash the buyer brings. Gifts, the buyer’s own funds, and approved secondary financing all count toward it.
The decision score sets the leverage
FHA reads credit through the decision score, and the threshold for maximum financing is far below conventional norms. A thin file or a non-traditional credit history is not a bar: it is underwritten manually on rent, utilities, and other payment records, with the ratios held to the base table.
Two premiums: upfront and annual
Two numbers to know: the upfront premium added to the loan at closing, and the annual premium paid monthly. The schedule in the snapshot shows how the annual premium steps with leverage and loan size, and the calculator applies it to a California price.
Qualifying ratios and compensating factors
Effective income is the income the lender can document as stable and likely to continue, and the ratios are measured against it. A California buyer with a modest score is held to the base ratios; above the maximum-financing score the compensating factors open the higher tiers.
Every input is yours to change in the calculator below: the California price, the down payment, the term, the rate, and the escrows. The minimum investment, the premiums, and the ratios come from the program; the payment is what follows from them.
Where California’s first-time and moderate-income buyers shop — and how FHA fits.
An FHA loan is sized from a specific price and a specific income, but the market sets the range. These California figures from the Census describe ownership, value, and income across the state and the markets Lendmire tracks.
Statewide figures provide general market context, not an appraisal or an income calculation. Household income matters for the ratios, value for the investment and the premium, and the county limit for the ceiling; the Census tells you the market, the file tells you the loan.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Where California’s FHA buyers shop — market by market.
Lendmire serves California market by market. The cities below are ranked by owner households, and each links to its own FHA guide with local Census context, the same program parameters, and the calculator applied to local prices.
Los Angeles
In Los Angeles, owner households number near 518,423, about 36% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $921,200, median household income near $81,939, population near 3.86M.
San Diego
In San Diego, owner households number near 251,100, about 47% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $906,700, median household income near $108,077, population near 1.39M.
San Jose
San Jose holds one of the largest pools of owner households among Lendmire’s California markets — roughly 183,331, about 56% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $1,233,200, median household income near $146,427, population near 990K.
San Francisco
In San Francisco, owner households number near 139,057, about 38% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $1,394,500, median household income near $140,970, population near 830K.
Sacramento
Roughly 103,571 Sacramento households own their homes (52% of the total), which makes it a metropolitan market where FHA purchases close across a wide range of prices and property types. Census context: median value near $506,300, median household income near $87,321, population near 529K.
Fresno
Fresno holds one of the largest pools of owner households among Lendmire’s California markets — roughly 90,465, about 50% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $374,800, median household income near $70,991, population near 546K.
Statewide, the program rules are the same in every California market: the minimum investment, the decision score for maximum financing, the premium schedule, the ratio ladder, the occupancy rule, and HUD’s property standards. What changes by county is the loan limit, which a Lendmire loan officer confirms for the county where you are buying.
Four ways California buyers put an FHA loan to work.
Because FHA insures the lender, it fits the California borrower who has the income for the payment but not the profile a conventional loan asks for. Four examples follow.
Buy a small multi-unit home and live in one unit
The multi-unit purchase is where FHA’s leverage does the most work: a California buyer brings the minimum investment on a two- to four-unit property, occupies one unit, and qualifies with the rent from the others counted as HUD allows.
Take cash out of a home with equity
The cash-out refinance replaces the California home’s first mortgage with a larger FHA loan and hands over the difference, after twelve months of occupancy and with the premiums applied to the new loan; the ratios and the payment history decide the file.
Buy on a recovering credit profile
FHA is the program for the buyer a conventional file turns away: a decision score below agency norms, a seasoned derogatory event, or a thin file underwritten on rent and utilities. In California that buyer qualifies on the whole picture.
Buy a first home with the minimum investment
For a first purchase in California, FHA pairs a small investment with a forgiving score and a ratio ladder that stretches with compensating factors; the file closes on the appraisal, the income, and the decision score.
Estimate the FHA payment on a California price before requesting a quote.
Estimate the payment before you ask for a quote: the California price, the down payment, the term, the rate, and the escrows are the inputs, and the minimum investment and the premium schedule come from the same guideline source as the snapshot. The result is an estimate, and the rate shown is a published market benchmark, not an FHA offer.
California FHA payment estimate
The defaults are California context, not your file: enter the real price, the real down payment, and the real escrows.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $600,000 price near California’s median owner-occupied home value (kept where an FHA loan is realistic in most counties), the FHA minimum investment as the down payment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for California (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; county loan limits are not checked here. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government.
Same buyer, three very different closings.
The same buyer can often close three ways, and the structures differ more than the headlines suggest: FHA with its insurance schedule, a conventional loan with private mortgage insurance that cancels, or a VA loan for an eligible borrower with no mortgage insurance at all.
FHA, conventional with mortgage insurance, or VA.
A small minimum investment that a gift can cover, a forgiving decision score, ratios that stretch with compensating factors, and HUD insurance priced by schedule rather than by score. The annual premium on a full-leverage thirty-year loan lasts for the term; many borrowers refinance out of it later.
Where FHA charges by schedule, conventional charges by score. A California buyer with strong credit and a small down payment may find the private premium smaller and the payment lower; a buyer with a modest score will not. See Lendmire’s conventional loan program.
VA undercuts FHA for the eligible borrower on the recurring costs: no investment, no monthly premium, no upfront premium, with a one-time funding fee in their place. The questions are eligibility, entitlement, and whether the home meets VA’s property standards. See Lendmire’s VA loan program.
The decision is rarely close once the profile is known. FHA tends to fit the modest score, conventional the strong score with equity to come, and VA nearly any file with eligibility. The comparison is run on the actual numbers, in writing.
What to prepare for a California scenario review.
An FHA file is documented more fully than a streamline refinance; the items below are what a California scenario review typically draws on.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the credit profile, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
Most surprises on a California FHA file trace back to one of these: a decision score that landed differently than expected, an appraisal with required repairs, a condominium without approval, or a county limit lower than the contract price.
Use these checks to keep the California file clean and fundable.
A clean California file answers three questions in advance: what decision score, what premium schedule, and whether the property is inside HUD’s rules and the county limit.
- Confirm the score: the lender’s report sets the decision score, the lowest middle score among the borrowers.
- Know the premium: the exit from the premium is a refinance, not an equity threshold.
- Mind the ratios: automated approvals commonly allow more than the manual table.
The decision score decides the leverage
The decision score is the lowest middle score among the borrowers, read from the lender’s report; a self-pulled score can land differently. At or above the threshold a California buyer reaches maximum financing; the wholesale programs behind these pages start there.
How long the annual premium runs
Unlike private mortgage insurance, the FHA annual premium does not cancel as the home gains value. On a California full-leverage loan the exit is a refinance; the calculator shows the premium’s rate and duration for the leverage entered.
Ratios, compensating factors, and effective income
Files scored by HUD’s automated system follow the system’s finding, which commonly allows higher ratios than the manual table; a California file that the system refers to manual underwriting is read against the ladder instead.
Two- to four-unit homes and rental income
Three- and four-unit homes carry an extra test on an FHA file: the property’s rents must cover the payment to HUD’s standard. A California buyer eyeing a fourplex should have the lender run the test before writing the offer.
Seller contributions and the minimum investment
A California contract can shift most of the closing costs to the seller within the program’s limit, which leaves the buyer bringing the minimum investment and little else. The investment must be the buyer’s own or a gift; the contributions cover the rest.
From a California pre-approval to keys in hand.
An FHA file moves in a set order: pre-approval on the decision score and the ratios, the contract and the appraisal with HUD’s property standards, underwriting with any compensating factors documented, and closing with the premiums applied. The steps for a California buyer follow.
Pre-approval
Start with the decision score, the income, and the down payment. A Lendmire loan officer confirms the leverage, the ratios, and the county limit, runs the FHA structure against conventional and VA on the same numbers, and provides the terms in writing.
Contract and appraisal
With the contract signed, the lender orders an appraisal from an FHA Roster appraiser, who values the California home and checks it against HUD’s property standards. Seller contributions are checked against the program’s limit, and any condominium project approval is confirmed.
Underwriting
An automated approval follows the system’s finding; a manual file follows the ratio ladder. Either way, the California underwriter verifies the income, the assets, the credit history, and the property, and issues the approval with its conditions.
Closing
Closing is where the premiums become real: the upfront premium is financed into the total loan and the annual premium is part of the payment from month one. The California buyer takes the keys and HUD insures the lender.
A brokerage that matches the program to the buyer.
Lendmire is a mortgage brokerage licensed for consumer lending in sixteen states. On an FHA loan that means the program run against conventional and VA on the same numbers, the decision score and the premium schedule explained before the offer, and the terms in writing from a licensed loan officer.
Three programs, one set of numbers
FHA, conventional, and VA are run on the same California price, score, and income before a recommendation is made. The buyer sees the payment, the insurance, and the cash to close on each, and the choice is made on the figures rather than on habit.
The premium explained before the offer
No California buyer should learn at the closing table that the premium lasts for the term. The loan officer walks through the upfront premium, the annual premium, and the duration for the leverage chosen, and shows the conventional alternative on the same numbers.
Licensed, consumer-purpose, in writing
Lendmire is licensed in sixteen states for consumer mortgages, the loan is a consumer-purpose transaction with full disclosures, and every figure a California buyer relies on, from the investment to the premiums to the terms, is provided in writing by a licensed loan officer. Lendmire is not affiliated with FHA or HUD.
Trusted by first-time buyers & families alike.
California FHA loan FAQs
Plain answers to the questions California buyers ask most about FHA loans, in the order they usually ask them.
What is an FHA loan, and who is it for?
An FHA loan is the mortgage a California first-time buyer should compare first: insured by HUD, offered through lenders, written to a small minimum investment and a forgiving credit standard, and priced with mortgage insurance rather than a credit-based premium.
How much do I need to put down on an FHA loan in California?
The investment is the program’s minimum, applied to the lesser of price and appraised value. Putting down more lowers the premium’s duration: a loan that starts at or below ninety percent leverage sees the annual premium end after eleven years.
What credit score do I need for an FHA loan?
The score for maximum financing is in the snapshot. More useful than the number is what sits around it: no usable score can still qualify on non-traditional credit, and a score below the compensating-factor threshold holds the ratios to the base table.
How does FHA mortgage insurance work, and how long do I pay it?
Two premiums: an upfront premium, a share of the base loan that is usually financed into the total, and an annual premium charged monthly, set by HUD’s schedule for the term, the leverage, and the loan size. On a thirty-year loan at full leverage the annual premium runs for the term; it ends after eleven years only when the loan started at or below ninety percent loan-to-value.
What is the FHA loan limit in California?
The limit is set by county and revised each year, so ask a loan officer for the current figure where you are buying. It caps the loan, not the price: a California buyer above the limit brings the difference as a larger investment or moves to a conventional loan.
Can I take cash out with an FHA refinance?
It is available after twelve months of ownership and occupancy, at the leverage shown in the snapshot, on a principal residence only. The new loan is an FHA loan with the full premium structure.
Do I have to live in the home to use an FHA loan?
Yes. FHA loans are for principal residences: at least one borrower occupies the home within two months of closing and intends to stay at least a year. Second homes and rentals are outside the program, though a buyer may live in one unit of a two- to four-unit home and rent the others.
How does an FHA refinance work?
FHA refinances come in three shapes, and the upfront and annual premiums apply to the new loan on each. A California owner with an existing FHA loan usually starts with the streamline; an owner taking cash out needs a year of occupancy and the program’s cash-out leverage.
Can the seller pay my closing costs on an FHA loan?
Yes, up to the program’s limit as a share of the price, shown in the snapshot, covering closing costs, prepaid items, and discount points. Contributions above the limit reduce the price for loan-sizing. The minimum investment itself cannot come from the seller.
What does an FHA appraisal check?
Both the value and HUD’s property standards. Peeling paint, roof damage, missing handrails, or a failed system can bring required repairs, usually settled by the seller before closing on a California purchase.
Run the California FHA numbers, then get the terms in writing.
Enter your California figures in the calculator, then request a review. The minimum investment, the premiums, the ratios, and the county limit are confirmed against the program rules, and the terms come in writing from a licensed loan officer.
This guide covers California — for the program overview, see Lendmire’s FHA loan program.
All California city guides (6): Fresno · Los Angeles · Sacramento · San Diego · San Francisco · San Jose
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans