What are the requirements for a down payment?

A down payment is a portion of the total purchase price that is paid in cash when purchasing residential real estate in California. Generally, the minimum down payment required in California is three percent of the purchase price or appraised value, whichever is less. However, the minimum amount may differ depending on the type of loan. For Federal Housing Administration (FHA) loans, a down payment as low as 3.5 percent is typically required. Veterans Affairs (VA) loans are available for those with military service and do not require a down payment. Those eligible for a VA loan must obtain a Certificate of Eligibility (COE) from the Department of Veteran Affairs. In some cases, a down payment can be lower than three percent if the buyer is taking advantage of local government programs such as the California Homebuyer’s Downpayment Assistance Program (CHDAP). This program provides a deferred payment loan to help first-time home buyers who are income eligible. The loan amount can be up to three percent of the purchase price or appraised value of the home, whichever is less. In addition, some lenders may offer down payment assistance programs to qualifying buyers. The requirements for these programs vary, so it’s best to check with a lender to determine eligibility and the required down payment amount. Overall, the required down payment amount to purchase residential real estate in California depends on the type of loan and other eligibility requirements, but is typically at least three percent of the purchase price or appraised value.

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