California Home Loans & Mortgage Rates

California’s housing market is expensive. That’s not a surprise. The statewide median sits around $780,000 (all property types) and the California Association of Realtors projects single-family homes hitting a record $905,000 median by year-end 2026. Only about 18% of California households can afford the median-priced home.

But here’s what most people miss: California’s loan limits and assistance programs are designed specifically to deal with these prices.

FHA loan limits in California reach as high as $1,249,125 in high-cost counties like Los Angeles, San Francisco, Orange, and San Diego. That’s more than double the national floor. Conforming limits hit the same ceiling. This means you can use government-backed financing on homes that would require jumbo loans in almost any other state. And CalHFA’s down payment assistance programs provide up to 3.5% of the purchase price in deferred, zero-interest help.

The market itself is slowly rebalancing. Homes are sitting longer (60 days median), active listings are up nearly 10% year-over-year, and the sales-to-list price ratio has dipped below 98%. Mortgage rates are expected to average around 6% this year, down from 6.6% in 2025. None of this makes California cheap, but it makes it more navigable than it’s been since before the pandemic.

Mpire Direct is licensed in all 58 California counties. Below you’ll find county-specific loan limits, state assistance programs, closing cost details, and the property tax rules you need to understand before buying.

2026 Loan Limit Takeaways

Santa Clara County (San Jose/Silicon Valley) hits the national FHA ceiling of $1,249,125. Los Angeles and Orange counties are right behind at $1,209,750. The entire Bay Area metro (San Francisco, San Mateo, Marin, Contra Costa, Alameda, Santa Cruz) comes in at $1,149,825. San Diego is $1,006,250. The Inland Empire (Riverside, San Bernardino) offers more affordable entry at $644,000 FHA. Central Valley counties like Fresno, Kern, and Stanislaus sit at the national FHA floor of $541,287.

The range is massive. A buyer in San Jose can get an FHA loan at $1.25 million while a buyer in Bakersfield is capped at $541,287. Know your county’s limits before you start shopping.

Down Payment Assistance Notes

CalHFA programs require specific CalHFA first mortgage products. You can’t use MyHome assistance with just any lender’s FHA loan — it must be a CalHFA FHA loan through a CalHFA-approved lender. This is a common point of confusion. Funding comes in waves. Programs like Dream For All and the Forgivable Equity Builder have opened and closed quickly due to overwhelming demand. Get pre-approved with a CalHFA lender early so you’re ready when funding is available.

California also has extensive local DPA programs. San Francisco’s DALP offers up to $500,000 for educators and first responders. Los Angeles, San Diego, Sacramento, San Jose, and dozens of other cities and counties run their own programs. Some use lottery systems due to high demand. Check with local housing authorities for programs in your target area.

Closing Costs in California

California closing costs are moderate relative to the state’s home prices, but the dollar amounts can be significant given how expensive homes are.

Transfer Tax: California charges a documentary transfer tax of $1.10 per $1,000 of the sale price. On an $800,000 home, that’s $880. The seller customarily pays this. Some cities (Los Angeles, San Francisco, Oakland, Berkeley, and others) add their own city transfer taxes on top, which can be substantial. San Francisco’s transfer tax ranges from 0.5% to 6% depending on the price and property type. LA’s is 0.56% (with Measure ULA adding 4% on sales over $5 million).

Escrow Fees: California uses escrow companies (not attorneys) to handle closings. Escrow fees typically run $2-$3 per $1,000 of the purchase price, split between buyer and seller. On an $800,000 purchase, expect roughly $800-$1,200 per side.

Title Insurance: In Southern California, it’s customary for the seller to pay for the owner’s title policy and the buyer to pay for the lender’s policy. In Northern California, the convention often reverses, with the buyer paying for both. Know your local custom and negotiate accordingly.

Natural Hazard Disclosure: California requires extensive natural hazard disclosures covering earthquake zones, flood zones, fire hazard severity zones, and more. These are standard but can affect insurance costs significantly.

Home Insurance Crisis: California is experiencing a major home insurance upheaval. Several major insurers have pulled back from the state, particularly in wildfire-prone areas. Budget extra time and money for insurance. In fire-prone zones, you may need to use the FAIR Plan (the state’s insurer of last resort) which can be significantly more expensive.

Estimated Total Buyer Closing Costs: On an $800,000 purchase with a $760,000 mortgage, expect approximately $16,000-$28,000 in total buyer closing costs (2-3.5% of purchase price). This includes lender fees, title insurance, escrow fees, appraisal, prepaid taxes and insurance, and recording fees.

Property Taxes in California

California’s effective property tax rate is roughly 0.71%, which is below the national average. But because home values are so high, the actual dollar amounts are significant.

Proposition 13: California’s famous Prop 13 (1978) limits property tax to 1% of the assessed value at the time of purchase, plus any voter-approved local bonds (which typically add 0.1-0.5%). Your assessed value can only increase by a maximum of 2% per year, regardless of how much the market value rises. This is a huge benefit for long-term homeowners. However, when a property is sold, it’s reassessed to current market value. This means new buyers in hot markets face much higher tax bills than long-term neighbors.

Proposition 19: Passed in 2020, Prop 19 allows homeowners 55 and older, disabled persons, and wildfire/disaster victims to transfer their Prop 13 tax base to a new home anywhere in California (up to 3 times). It also limited parent-child property tax transfers for non-primary residences.

What to expect on a new purchase: On an $800,000 home, expect roughly $8,000-$10,000 per year in property taxes (1% base plus local bonds). That’s $667-$833 per month added to your mortgage payment. In some areas with extensive local bonds, it can push to 1.25% or more.

Supplemental Tax Bills: New California homeowners get hit with supplemental property tax bills in their first year. These are one-time adjustments that “catch up” the tax based on your new assessed value. They can be several thousand dollars and often surprise first-time buyers. Budget for them.

USDA Loan Eligibility in California

California has USDA-eligible territory, primarily in the Central Valley and rural northern and eastern regions. Eligible areas include counties like: Butte, Colusa, Glenn, Lassen, Madera (portions), Merced (portions), Modoc, Plumas, Shasta (portions), Sierra, Siskiyou, Tehama, Trinity, Tulare (portions), and Yuba (portions).

The Inland Empire (Riverside and San Bernardino counties) has limited USDA eligibility in outer rural areas. Some exurban communities east of Sacramento also qualify.

USDA eligibility is more limited in California than in states like Texas or Florida because of the state’s urban density and high home values. But for buyers willing to look at rural communities, a USDA loan offers zero down payment in a state where saving for a down payment is one of the biggest barriers to homeownership. Check the USDA eligibility map for specific addresses.