HOW TO BUY A HOME WITH ZERO DOWN PAYMENT IN CALIFORNIA

How to Buy a California Home with Zero Down Payment

Look, if you’re paying $3,000 a month in rent but can’t scrape together enough for a down payment, you’re not alone. That’s the trap most people find themselves in. You can afford the monthly payment, you just can’t get past that initial $15,000 to $30,000 hurdle while you’re already handing over three grand to your landlord every month.

There’s a down payment assistance program through A Good Lender in California that solves this problem, and most first-time buyers have never heard of it. We cover your entire 3.5% FHA down payment, capped at your county’s FHA maximum. After you’ve lived in the house for six months, you never have to pay it back. Not three years, not five years. Six months and you’re done.

I’ve been doing mortgages in California for over 30 years. This is the fastest way out of the rent trap I’ve seen.

What Is California’s Zero Down Payment Assistance Program?

We pay your 3.5% FHA down payment at closing. The amount is capped at your county’s FHA loan limit. It does not get recorded as a second mortgage on your property, but here’s the thing: you don’t make any payments on it. Zero. No monthly bill, no interest accruing. It just sits there quietly for six months.

After 180 days, the whole thing gets forgiven provided your payments were made on time. You don’t pay it back. You don’t owe taxes on it. It’s just yours.

Compare that to the other California down payment programs out there. CalHFA’s Forgivable Equity Builder makes you wait five years. Dream For All makes you pay back the money plus a chunk of your home’s appreciation when you sell. CalHFA MyHome? You have to pay the whole thing back eventually. This program is different. Six months and you’re completely done with it.

The only real requirements are that you work with A Good Lender, use it with an FHA loan, and actually live in the home for those six months. That’s the deal. Want to compare with other California DPA programs?

Ready to See Your Numbers? Use our county calculator to find out exactly how much down payment assistance you qualify for. Takes 30 seconds. Check Your County Limits →

FHA Loan Limits by County (2025)

This grant covers the full 3.5% FHA down payment on any home price. However, the program caps assistance at a $806,000 loan amount, which means the maximum grant is $29,197 (3.5% of the sales price). You can buy homes up to $835,000 depending on the county limit.

Most lower-cost counties max at $524,225. High-cost coastal markets can go higher, but this grant program caps at $806,000. If you need to finance above $806,000, you can use a conventional loan which goes up to $1.2 million+ in high-cost counties like Orange County. Check your specific county’s limit at agoodlender.com/no-down-payment-program-in-california.

Who Qualifies for Zero Down Payment Home Loans in California?

If you can qualify for an FHA loan or conventional loan, you can qualify for this program. That’s it.

There’s no special first-time buyer requirement, no income caps, no homebuyer education course. Standard mortgage qualification rules apply. Credit score, income verification, debt-to-income ratio. Same stuff we check for any home loan.

The main thing to know is the program’s grant cap. This grant covers 3.5% of any home price, but assistance is capped at $806,000, which means the maximum grant is $29,197. On homes under $806,000, you get the full 3.5%. On homes above $806,000, you can use a conventional loan option.

Most California counties have lower FHA limits anyway—$524,225 in Fresno/Riverside, $625,500 in Sacramento—so the $806,000 cap rarely comes into play. And if you want to finance above $806,000, you can use a conventional loan instead, which goes up to $1.2 million+ in high-cost counties like Orange County. Check your specific county’s limits at agoodlender.com/no-down-payment-program-in-california.

The other requirement is living in the home as your primary residence for at least six months. That’s when the assistance gets forgiven. After that, you can sell, refinance, or stay as long as you want.

How Does Zero Down Payment Assistance Work at Closing?

When you close on your home, we pay your down payment directly at the closing table. On a $450,000 purchase, that’s $15,750 showing up as a credit against your down payment requirement. You’re not making monthly payments on it. There’s no interest ticking away. It just sits there while you live in the home and make your regular FHA mortgage payments.

After 180 days, the whole thing gets automatically forgiven.

Real Example: Buying a $450,000 Home with Zero Down in Sacramento

Here’s an example with actual figures. Suppose you are buying a $450,000 house in Sacramento.

Zero Down Payment Coverage in Sacramento

The down payment requirement with an FHA is 3.5%. This equates to $15,750. We pay all of this through this particular program. Your down payment? $0.

Covering Your Closing Costs (3 Strategies)

But you still need closing costs, which typically run about $8,000 to $10,000. This is where you can get creative.

Strategy 1: Negotiate Seller Credits

The seller credits are quite significant. This is something you can negotiate up to 6% of the price, which, if you are buying a house costing $450,000, you can get $27,000. But what you can realistically get, and this will be ample to pay your closing costs of $10,000, is between 3% and 4% from the sellers.

Strategy 2: Use Family Gift Funds

So, if you have family members who can help, FHA permits gift money from family members. All you need is a gift letter. So, if your parents can afford to kick in $5,000, that already takes care of half your closing expenses.

Strategy 3: Accept Lender Credits

Another choice is lender credits. You take a small bump in interest rate, perhaps to 6.75% from 6.5%, and receive $3,000 to $5,000 in lender credits, which you can apply against your closing costs. This raises your monthly payment slightly, but you need less out-of-pocket money up-front.

Combining Strategies to Minimize Out-of-Pocket Costs

People typically pay for things by mixing and matching these approaches. Maybe you receive seller credits to pay for most, then perhaps a small gift from family members. So you walk into closing with perhaps $3,000 to $5,000 out of pocket. And if you’ve already got that money in your savings and you’re already paying $2,800 a month rent, you can afford to purchase a house.

Calculate Your Zero Down Payment Scenario See exactly how much lender assistance you’d get for a home in your county. No signup required. Use Free Calculator →

Where Does Zero Down Payment Assistance Work Best in California?

This program is available all over the state through A Good Lender, and it covers all counties in California.

Sacramento and Central Valley Markets

Fresno, Bakersfield, Stockton: Median price ranges from $350,000 to $500,000. Our contribution towards closing costs and assistance with your 3.5% down payment will apply to most homes in these areas.

Los Angeles and San Diego Metro Areas

Look at areas like San Fernando Valley, Inland Empire, East County San Diego where $400,000 to $550,000 homes are common. The full 3.5% down payment gets covered.

Bay Area and Orange County High-Cost Markets

Higher prices, but the program still covers the full 3.5% FHA down payment requirement up to your county’s FHA limit. On a $700,000 home in Orange County, we pay the full $24,500 down payment (3.5%).

Next Steps to Get Zero Down Payment Assistance in California

If you want to use this program, here’s what you actually need to do.

First, check your county’s loan limits. Go to agoodlender.com/no-down-payment-program-in-california and punch in your county. You’ll see your FHA limit, conventional limit, and how much down payment assistance you’re eligible for. Takes maybe 30 seconds.

Second, get preapproved with A Good Lender. We offer this program. You’ll need to provide income documentation, get your credit pulled, verify your employment. Standard preapproval process. The preapproval letter should specifically mention the down payment assistance so sellers and agents know you’re serious.

After that? Find a home, make an offer, close on it. We pay your down payment at closing. After six months, it’s completely forgiven. That’s the whole process.

If you’ve been stuck renting because you can’t save $20,000 while you’re paying $3,000 a month to your landlord, this is how you get out. Check your numbers and get moving.

Related Down Payment Assistance Programs

Looking for other ways to cover your down payment? California offers several additional programs worth exploring:

• Elite Grant in California - 3.5% FHA grant with 6-month forgiveness, perfect for first-time buyers with good credit
• CalHFA Programs - State-backed down payment assistance with 10-year forgiveness options
• Local DPA Programs - City and county specific grants that can be combined with other programs
• FHA Loans in California - Complete guide to FHA financing with low down payment requirements
• All Down Payment Assistance Programs → - Compare every DPA option available in California