First-Time Home Buyer in San Diego: 2026 Guide to Down Payment Assistance, Loans & Smart Buying Strategy

Buying your first home in San Diego can feel overwhelming. Prices are high, competition is real, and many buyers assume they need 20% down to get started.

That’s not true.

In 2026, there are multiple first-time home buyer programs in San Diego, including low down payment loans and down payment assistance options that can make homeownership much more achievable.

If you are planning to buy your first home in San Diego County, this guide breaks down exactly what you need to know.

Who Qualifies as a First-Time Home Buyer in San Diego?

You may qualify as a first-time home buyer if:

• You have not owned a primary residence in the past 3 years

• You are purchasing your first property ever

• You are a military buyer using VA benefits

• You are purchasing as an owner-occupant

Many buyers qualify even if they previously owned property years ago.

How Much Do You Need for a Down Payment in San Diego?

Contrary to popular belief, 20% down is not required.

Common options include:

• FHA loans with 3.5% down

• Conventional loans with as little as 3%–5% down

• VA loans with 0% down for eligible veterans

• Down payment assistance programs that help cover upfront costs

In many cases, buyers can enter the market with far less cash than expected.

Down Payment Assistance Programs in San Diego (2026)

There are multiple programs available that can help cover part of your down payment or closing costs.

1. California Housing Finance Agency (CalHFA)

CalHFA offers:

• Down payment assistance loans

• Deferred-payment second loans

• Forgivable assistance options (program dependent)

• Income-based qualification guidelines

These programs are typically designed for buyers within certain income limits and purchasing a primary residence.

2. San Diego County First-Time Buyer Assistance Programs

Depending on availability and funding cycles, local programs may offer:

• Deferred loans

• Low-interest second mortgages

• Income-based assistance

• Help with closing costs

Program availability changes frequently and funding is limited, so early planning is important.

3. Lender-Based Assistance Programs

Some lenders offer:

• Grant programs

• Community lending credits

• Rate incentives

• Reduced mortgage insurance options

Not all lenders offer the same programs, so working with a knowledgeable mortgage professional matters.

Best Loan Options for First-Time Buyers in San Diego

FHA Loan

• 3.5% down

• Flexible credit guidelines

• Available for single-family homes and 2–4 unit properties (owner-occupied)

FHA loans are commonly used by first-time buyers in San Diego.

Conventional Loan

• As low as 3%–5% down

• Lower long-term mortgage insurance costs in many cases

• Competitive rates

Strong credit borrowers often benefit from conventional financing.

VA Loan

For eligible veterans and active-duty military:

• 0% down

• No mortgage insurance

• Competitive interest rates

• Can be used for duplexes, triplexes, or fourplexes (owner-occupied)

In a military-heavy market like San Diego, VA loans are a powerful option.

How Much Income Do You Need to Buy in San Diego?

Qualification depends on:

• Purchase price

• Down payment

• Debt-to-income ratio

• Interest rate

• Property taxes and insurance

Many buyers are surprised that rental income (if purchasing a duplex or ADU property) can help offset qualification requirements. Many first-time buyers in San Diego use house hacking to reduce their monthly housing costs by renting out part of the property.

A full pre-approval is the first step before touring homes.

Common Mistakes First-Time Buyers Make

• Waiting for perfect market timing

• Not getting pre-approved early

• Underestimating closing costs

• Skipping down payment assistance research

• Buying at the top of their approval range

• Not factoring in long-term plans

Preparation reduces stress and improves negotiating power.

Should First-Time Buyers Consider 2–4 Unit Properties?

In San Diego, some first-time buyers use a strategy called house hacking.

This involves:

• Buying a duplex, triplex, or fourplex

• Living in one unit

• Renting the others

• Using rental income to offset the mortgage

This can significantly reduce effective housing costs and accelerate wealth building.

Steps to Buy Your First Home in San Diego

1. Meet with a lender to review loan options

2. Explore down payment assistance eligibility

3. Determine budget and target neighborhoods

4. Get fully pre-approved

5. Tour properties and submit competitive offers

6. Complete inspections and close

Having a structured plan makes the process far more manageable.

Is Now a Good Time to Buy in San Diego?

San Diego remains a supply-constrained coastal market with long-term appreciation trends.

While short-term market conditions fluctuate, long-term homeowners often benefit from:

• Appreciation

• Principal paydown

• Rent inflation hedge

• Tax advantages

First-time buyers who enter strategically and hold long-term tend to benefit most.

Final Thoughts: First-Time Home Buying in San Diego

Buying your first home in San Diego is not just about qualifying for a mortgage. It’s about choosing the right strategy, understanding assistance programs, and planning long-term.

With low down payment options and down payment assistance programs available in 2026, homeownership is more attainable than many buyers realize.

Twana Rasoul
San Diego Real Estate Advisor
DRE #02026495
619-792-8295

If you are a first-time home buyer in San Diego and want to review loan options, down payment assistance eligibility, and neighborhood strategy, schedule a consultation before starting your home search.