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Buying a Home in California With No Down Payment

Saving up for a down payment is a major financial hurdle for some California home buyers. As a result, people are always looking for ways to buy a house with little or no money down.

There are ways to accomplish this goal, and we will explore some of those options today. Here are some strategies for buying a home in California with no down payment.

How to Buy a Home in California With No Money Down

There are several ways to buy a home in California with no money down (or at least, none of your own). For instance, you could obtain the funds needed for your down payment from a family member, in the form of a gift. This is allowed under most mortgage loan programs these days. Members of the military can buy a home in California with no down payment by using the VA loan program.

Let’s take a closer look at these and other strategies for buying a house with no money down.

Using Down Payment Gifts

Whether you use an FHA or conventional mortgage loan to buy a house, you may be allowed to use gift money to cover your down payment. These are funds provided by a family member, employer, or other approved donor to cover the investment requirement on your loan.

With some mortgage programs, including the popular FHA loan, the entire down payment can be gifted from a family member or other approved source. This would allow the buyer to purchase a home in California with none of their own money down. Many conventional, non-FHA loans allow this as well.

The stipulation here is that the money being provided by a third party must truly be a gift. It cannot be a short-term loan in disguise. In fact, the donor will have to sign a “gift letter” stating they do not expect any kind of repayment.

With this strategy, a down payment is still being made. But it’s being made by someone other than the buyer. So it’s one way to buy a home in California with no down payment out of your own pocket.

Members of the military have another good option in the VA loan program. So let’s talk about that next.

VA Loans for Military Members

We are passionate about the VA loan program, because it provides so many benefits to our brave men and women in uniform. If you’re a member of the military, it’s hard to beat this program. It allows eligible borrowers to buy a house in California with no money down whatsoever.

A VA-guaranteed home loan can account for 100% of the purchase price, in most cases. This eliminates the need for a down payment. This program can also help borrowers avoid mortgage insurance, which is usually required for loans that amount to more than 80% of the home’s value.

Learn more about VA loans here, or contact us with any questions you have.

Down Payment Assistance Programs

There are programs within the state that are designed to help home buyers offset the cost of a down payment. The California Homebuyer’s Downpayment Assistance Program (CHDAP) is one example. Through this program, eligible borrowers could receive a deferred-payment junior loan up to 3% of the home’s purchase price. These funds could be used to cover the down payment.

As its name implies, this program is limited to first-time home buyers. But the state defines a “first-time” buyer in fairly broad terms. According to the official program eligibility guidelines, a first-time buyer is “someone who has not owned and occupied their own home in the last three years.”

While this program would allow you to buy a home in California with no money down, it’s not “free money.” It’s a loan that must be paid back. But it does ease the burden of making a large out-of-pocket investment up front.

Related: A good time to buy in California?

Want to Explore Your Options?

If you want to buy a home in California, but you lack the funds for a large down payment, we might be able to assist you. We can help you explore your options for minimizing your down-payment investment. We offer a variety of mortgage loan products and programs, some with flexible qualification criteria.

Get started today: Bridgepoint Funding has been helping home buyers in California for more than 15 years. Please contact us if you’d like to get pre-approved for a loan. Just call (925) 478-8630, or send an email to

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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