Conventional Loan Guide · California
Conventional Loan Requirements in California (2026)
Everything a California buyer needs to know to qualify for a Conventional Loan — credit score, down payment, DTI limits, and local considerations.
Conventional Loan at a glance
Conventional loans conform to Fannie Mae / Freddie Mac guidelines and aren't backed by the government. They're the most common loan type in the U.S. and offer the widest range of terms, property types, and borrower profiles.
Eligibility in California
- 620+ FICO minimum (740+ for best pricing)
- 45% DTI standard, up to 50% with strong compensating factors
- 3% down for first-time buyers (HomeReady/Home Possible) or 5% otherwise
- Primary, second home, and investment properties all eligible
- Two years of employment history preferred
California closing cost realities
California's average effective property tax rate is 0.75%, and homeowners insurance averages around $1,400/yr. Both are collected in your escrow account and factored into the DTI your lender uses to qualify you — so a Conventional approval in a high-tax California county requires more income than the same purchase price in a low-tax state.
Frequently asked questions
What is the minimum credit score for a Conventional loan in California?
620 is the standard minimum for a Conventional Loan in California. Some lenders will go lower with compensating factors like a larger down payment or strong reserves.
What is the minimum down payment for a Conventional loan in California?
Conventional Loan borrowers in California need at least 3% down. Down payment assistance programs in California can cover part or all of this.
Does a Conventional loan require mortgage insurance?
Conventional Loan: PMI required if <20% down, but drops off automatically at 78% LTV.
Who is a Conventional loan best for in California?
Conventional Loans in California are best suited for buyers with 680+ credit and 5%+ down who want to avoid FHA's lifetime MIP.
What is the Conventional loan limit in California?
Most California counties use the base Conventional limit of $806,500 for a single-unit home in 2026. High-cost counties in California may allow substantially higher loan amounts.
Am I actually ready for a Conventional loan?
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