Question 1

What's the conforming loan limit in Santa Cruz County for 2026?

Accepted Answer

The 2026 conforming limit is $1,249,125. FHA and VA loans cap at the same amount. Loans above this require jumbo financing.

Question 2

Is Santa Cruz County an FHA high-cost area?

Accepted Answer

Yes. Santa Cruz County is designated FHA high-cost for 2026. This affects upfront mortgage insurance and some underwriting rules.

Question 3

Is Santa Cruz County a VA high-cost area?

Accepted Answer

Yes. VA loans in Santa Cruz County follow high-cost-area rules for 2026. The funding fee and eligibility thresholds may differ from standard VA loans.

Question 4

What credit score do I need to buy in Capitola?

Accepted Answer

Conventional loans typically require 620 FICO minimum. FHA accepts 580 FICO with 3.5% down. VA loans have no strict floor but lenders usually want 620+.

Question 5

How much down payment do I need for a conventional loan?

Accepted Answer

Conventional loans accept 3% to 5% down for qualified buyers. At 20% down or more, you avoid PMI entirely. Between 5% and 20%, PMI applies until 78% LTV.

Question 6

Do I need 20% down to avoid PMI on a conventional loan?

Accepted Answer

Yes — 20% down eliminates PMI on conventional loans. With less than 20% down, PMI is required. PMI cancels automatically at 78% LTV.

Question 7

What does FHA require for a down payment?

Accepted Answer

FHA requires a minimum 3.5% down payment with a 580 FICO score. The upfront mortgage insurance premium is 1.75% of the loan amount. MIP runs for life if down is under 10%.

Question 8

Can I get a VA loan with zero down in Capitola?

Accepted Answer

Yes. VA loans allow zero-down financing for eligible veterans and active-duty service members. You'll pay a funding fee instead of PMI. The fee is 2.15% at zero down for first-time use.

Question 9

How does the new student housing at UC Santa Cruz affect Capitola's market?

Accepted Answer

UC Santa Cruz's approved housing complex targets a fall 2029 opening. This expansion may ease regional housing pressure over time. Local demand remains strong in the near term.

Question 10

What's the typical property tax rate in Santa Cruz County?

Accepted Answer

Santa Cruz County property taxes run about 0.76% of assessed value annually. Proposition 13 caps increases at 2% per year. Your actual bill depends on local assessments and special districts.

Question 11

How long does it take to close a home purchase in Capitola?

Accepted Answer

Most conventional closings take 30 to 45 days from offer to funding. FHA and VA loans may take 45 to 60 days. Timelines depend on your lender and local title company.

Question 12

What income do I need to qualify for a mortgage in Capitola?

Accepted Answer

Lenders typically want your housing payment under 28% of gross income. Santa Cruz County's median household income is $109,266. Your approval depends on debt, assets, and the loan program.

Question 13

When does FHA mortgage insurance cancel?

Accepted Answer

FHA mortgage insurance (MIP) runs for life if you put down less than 10%. With 10% or more down, MIP cancels after 11 years. The upfront MIP is 1.75% of the loan amount.

Question 14

Do jumbo loans require 20% down?

Accepted Answer

Jumbo loans typically require 20% down or more. Lenders usually want 700+ FICO, strong reserves, and solid income documentation. Terms are stricter than conforming loans above $1,249,125.

Capitola mortgage questions answered