California · State guide
How to buy a house in California
The most expensive market in the country, but with the nation’s strongest property-tax protection and unusually generous down payment help — set against a serious home-insurance crisis. Here is the playbook for buying in the Golden State.
Last updated June 2026
Why California is different
Buying a house in California, the short version
The federal process is the same everywhere — read the complete guide to buying a house for the eight universal steps — but California is its own world, with unique programs, a famous property-tax system, and the heaviest disclosure rules in the country.
The picture: California is the most expensive mainland market (a statewide median around $930,000; the Bay Area and coastal counties top $1 million, while the Inland Empire and Central Valley are far cheaper). But buyers get real help — CalHFA offers down payment assistance, including the Dream For All shared-appreciation loan of up to $150,000 — and Proposition 13 caps how fast your taxes can rise once you own.
Two things define buying here. Your property tax resets to your purchase price when you buy (so you’ll pay far more than a long-time neighbor), and California is in a home-insurance crisis driven by wildfire. Always confirm you can insure a specific home before you commit. Use the 50-state hub to compare other states.
The market
What homes cost in California
The priciest market in the country, with an enormous gap between the coast and the interior.
The statewide median single-family price hit a record ~$930,000 in spring 2026 (California Association of Realtors), up about 3% year over year, with a record share of sales above $1 million. Affordability is the tightest in the nation — only about 22% of households can afford the median home. Prices vary enormously by region:
Median prices by area
San Jose / Santa Clara is the priciest, ~$1.49M · Orange County ~$1.47M · San Francisco ~$1.3M+ · San Diego ~$1.07M · Ventura ~$992K · Los Angeles County ~$845K · Riverside (Inland Empire) ~$640K · San Bernardino ~$495K · Sacramento ~$475K · Fresno (Central Valley) the most affordable big metro, ~$378K. Eleven counties had median prices over $1 million in early 2026.
Down payment & rate help
CalHFA programs
You don’t apply directly — you work through a CalHFA-approved lender. A 660–680 credit score and a homebuyer course are required.
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CalHFA first mortgages
The core: a 30-year fixed loan — CalHFA Conventional, CalPLUS (bundled with closing-cost help), or CalHFA FHA/VA/USDA. You take one of these as your main loan, then layer assistance on top as a deferred “silent second.”
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MyHome & ZIP assistance
MyHome is a deferred junior loan for the down payment — up to 3.5% (FHA) or 3% (conventional) of the price. The Zero Interest Program (ZIP) adds 2%–3% for closing costs (with a CalPLUS loan), at 0% interest with no monthly payment.
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Dream For All (by lottery)
The flagship: a shared-appreciation second of up to 20% of the price, capped at $150,000, with no monthly payment. You repay the original amount plus a share of the home’s appreciation when you sell. It’s rationed by lottery and requires first-generation, first-time buyer status.
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Local & federal help
Cities run big programs — Los Angeles (LIPA, up to ~$161,000), San Francisco (DALP), San Diego, Orange County. Plus FHA (3.5% down), VA (0% down, no loan limit in CA), and USDA (0% down) in rural areas.
The CalHFA rules in brief
You’ll generally need a 680 credit score (660 if your income is at or below 80% of area median), a DTI up to 45% (50% with a 700+ score), and completion of a homebuyer education course (the 8-hour eHome course, ~$100). Income limits vary hugely by county — from roughly $148,000 up to $300,000+ in the Bay Area. All CalHFA assistance is a deferred loan you repay later (Dream For All also shares appreciation), not a grant. “First-time” means no ownership in three years; Dream For All adds a first-generation requirement and is awarded by random lottery, so treat it as a long shot with MyHome + ZIP as your reliable fallback.
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Property taxes
Property taxes in California: Proposition 13
California property tax is defined by Proposition 13. The base rate is 1% of assessed value, your assessed value is set at your purchase price when you buy, and it can rise no more than 2% a year after that. With local voter-approved bonds and assessments, most buyers pay an effective rate around 1.1%–1.25% — sometimes more with Mello-Roos in newer communities. The statewide effective rate looks low (~0.7%) only because long-time owners are locked in at old values; a new buyer pays tax on the full purchase price.
Your taxes reset when you buy — plus a surprise supplemental bill
This is the key California rule: the home is reassessed to your purchase price at sale, so your bill will be far higher than the seller’s. Budget tax at ~1.1%–1.25% of what you pay, not the prior owner’s bill. You’ll also get a one-time supplemental tax bill 3–9 months after closing to true up the difference — and it’s often not covered by your escrow account, so set cash aside. Buying new construction in the Inland Empire or Central Valley? Check for Mello-Roos, which can add thousands a year. If you’re 55+ or a disaster victim, Proposition 19 lets you carry your low assessed value to a new home.
Closing & costs
Closing on a home in California
California is an escrow state — a neutral escrow company and a title company handle the closing, and an attorney isn’t required. Escrow usually runs 30–60 days. On costs, the county documentary transfer tax is $1.10 per $1,000, but many cities add their own much higher transfer taxes — Los Angeles’s “Measure ULA” adds 4%–5.5% on sales over $5M, and San Francisco’s tiered rate climbs toward 6% at the top. Who pays is negotiable (the seller customarily pays the owner’s title policy in Southern California; the buyer often does up north). On financing, the 2026 conforming limit is $832,750, but most coastal and Bay Area counties reach the high-cost ceiling of $1,249,125 (San Diego $1,104,000; others in between).
California has the heaviest disclosures in the country
Expect a stack of mandatory forms. The Transfer Disclosure Statement (TDS) covers the home’s condition and any death on the property within three years; the Natural Hazard Disclosure (NHD) — a required third-party report — tells you if the home sits in a flood, very-high fire, or earthquake zone; and you’ll get Mello-Roos, Megan’s Law, and lead-paint disclosures too. Read the NHD closely (it drives your insurance), and always get your own home inspection. The federal lead-paint rule applies to pre-1978 homes.
Insurance & risks
Insuring a California home
California’s statewide average premium is still moderate — roughly $1,400–$2,400 a year, below the national average — but that number hides a crisis. Wildfire is the dominant risk, and major insurers (State Farm, Allstate, Farmers) have pulled back or stopped writing new policies in high-risk areas. Homes in fire-prone zones now routinely pay $5,000–$25,000+, often through the state’s FAIR Plan insurer of last resort, whose enrollment has surged after the January 2025 Los Angeles wildfires.
Confirm coverage before you buy — and earthquake is separate
In 2026 California, the most important step is to get a bindable insurance quote before you remove contingencies — confirm you can actually insure (and afford) a specific home, especially in a high or very-high fire zone. Hardening your home (a Class-A roof, ember-resistant vents, 5-foot defensible space) earns required wildfire discounts under “Safer from Wildfires.” Note two big gaps: earthquakes are never covered by a standard policy (you add a separate California Earthquake Authority policy), and neither is flood (NFIP). Only about 14% of Californians carry quake coverage — consider whether you should.
Wherever you buy
The steps that work the same in California
California sets the local rules, but these parts of buying are the same everywhere.
Quick answers
Buying a house in California: common questions
How much money do you need to buy a house in California?
With a conventional loan you need 3% down, FHA 3.5%, and VA or USDA can be 0%. But on a ~$930,000 median home, even 3% is ~$28,000 plus closing costs — which is why CalHFA assistance and the Dream For All shared-appreciation loan (up to $150,000) matter so much here. See how much you really need →
Does California have down payment assistance?
Yes. CalHFA offers MyHome (3%–3.5% deferred), ZIP for closing costs, and the Dream For All shared-appreciation loan of up to 20%/$150,000 (by lottery, first-generation buyers). Cities like LA and SF add their own large programs. See assistance programs →
What is California’s Dream For All program?
It’s a shared-appreciation second mortgage of up to 20% of the price (capped at $150,000) with no monthly payment. You repay the original amount plus a share of the appreciation when you sell. It’s awarded by random lottery and requires first-generation, first-time buyer status.
How does Proposition 13 affect my property taxes?
Prop 13 sets your tax at 1% of your purchase price and caps annual increases at 2%. The catch for buyers: your home is reassessed to your full purchase price when you buy, so you’ll pay far more than a long-time owner. Budget ~1.1%–1.25% of your price.
Do property taxes go up when I buy in California?
Yes — the home is reassessed to your purchase price at sale. You’ll also get a one-time supplemental bill a few months after closing, which often isn’t covered by your escrow account, so set cash aside.
What credit score do you need in California?
CalHFA generally requires a 680 (660 if your income is at or below 80% of area median). For loans broadly, FHA can go to 580 and VA/USDA typically want 620. Check the score by loan type →
Do I need an attorney to buy a house in California?
No. California is an escrow state — a neutral escrow company and a title company handle the closing. Title insurance is standard, and escrow fees are typically split.
Can I get home insurance in California’s fire zones?
It’s the biggest question in 2026. Many insurers have pulled back from high-risk areas, so always get a bindable quote before removing contingencies. The FAIR Plan is the last-resort option, and hardening your home earns discounts. Earthquake and flood are separate policies.
What’s the conforming loan limit in California?
$832,750 in most counties, but the Bay Area, LA, Orange, and most coastal counties reach the high-cost ceiling of $1,249,125 (San Diego $1,104,000). VA loans have no county limit in California.
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