Loading
FHA Loans in San Diego
San Diego's competitive housing market presents unique challenges for first-time buyers and those with limited savings. FHA loans offer a practical solution with down payments as low as 3.5% and credit scores accepted from 580.
Government insurance through the Federal Housing Administration makes lenders more willing to work with borrowers who might not qualify for conventional financing. This program opens doors throughout San Diego County, from coastal communities to inland neighborhoods.
FHA financing accommodates various property types common in San Diego, including condos, townhomes, and single-family residences. The program's flexibility helps buyers enter the market despite the region's higher price points.
FHA loans require a credit score of at least 580 for the minimum 3.5% down payment. Borrowers with scores between 500-579 may still qualify with 10% down. Your debt-to-income ratio typically needs to stay below 43%, though exceptions exist for strong compensating factors.
You must occupy the property as your primary residence and provide proof of steady employment or income history for at least two years. The home must meet FHA property standards, which means it needs to pass an appraisal inspection for safety and livability.
FHA allows gift funds for your entire down payment and closing costs from approved sources like family members. Both U.S. citizens and lawful permanent residents qualify for FHA financing in San Diego.
San Diego offers numerous FHA-approved lenders, from national banks to local credit unions and mortgage brokers. Each lender sets their own overlays beyond FHA's baseline requirements, meaning approval standards vary even though the loan program remains the same.
Working with a mortgage broker gives you access to multiple lenders simultaneously, helping you find one whose overlays match your financial profile. Some lenders specialize in self-employed borrowers, while others excel with credit repair situations or non-traditional income.
Rates vary by borrower profile and market conditions, but FHA loans typically carry competitive interest rates due to government backing. Shopping among at least three lenders helps ensure you're getting favorable terms for your situation.
FHA's upfront mortgage insurance premium of 1.75% can be rolled into your loan amount rather than paid out of pocket. This preserves your cash reserves, which matters in San Diego where homeownership costs extend beyond the purchase price.
The annual mortgage insurance premium remains for the loan's life if you put down less than 10%. Many borrowers refinance to conventional financing once they've built 20% equity to eliminate this ongoing cost. Planning this transition from the start makes financial sense.
FHA allows seller concessions up to 6% of the purchase price, covering closing costs and prepaid items. In San Diego's market, negotiating seller credits can significantly reduce your cash needed at closing, especially on properties that have been listed longer.
VA loans offer even better terms for eligible military members and veterans, including zero down payment and no mortgage insurance. However, FHA serves borrowers without military service who need low down payment options with flexible qualification standards.
Conventional loans require higher credit scores and larger down payments but eliminate mortgage insurance once you reach 20% equity. FHA makes sense when you need to buy now with limited savings or credit challenges, while conventional works better for strong financial profiles.
USDA loans provide zero-down financing for eligible rural and suburban areas, though most of San Diego's urban core doesn't qualify. Conforming conventional loans offer another alternative but typically demand better credit and more substantial down payments than FHA.
San Diego's FHA loan limits accommodate the region's higher property values, though these limits update annually. The FHA program works particularly well for condos in San Diego, provided the complex appears on FHA's approved condominium list.
Many San Diego neighborhoods feature older homes that may require repairs to meet FHA property standards. Your lender will identify required fixes through the appraisal process, and sellers often agree to complete these repairs as part of the transaction.
Consider proximity to employment centers when choosing neighborhoods, as FHA evaluates your commute costs in the approval process. Military personnel stationed at local bases often choose FHA before they've established VA loan eligibility through service requirements.
FHA loan limits in San Diego County adjust annually based on area housing costs. Contact a local lender for current year limits, as these amounts change and vary by property type and number of units.
Yes, but the condominium complex must appear on FHA's approved list. Your lender can verify approval status, or the complex may qualify through the spot approval process for eligible projects.
You'll pay 1.75% upfront (typically financed into the loan) plus annual premiums that vary based on loan amount and down payment. Annual premiums typically range from 0.45% to 1.05% of the loan balance.
The property must meet FHA's minimum property standards at purchase. For homes needing work, consider the FHA 203(k) renovation loan, which finances both purchase and repairs in one mortgage.
Most lenders require a minimum 580 credit score for 3.5% down. Some will approve scores between 500-579 with 10% down, though individual lender overlays may set higher minimums.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.