Understanding Different Home Loan Types in Central California

Choosing the right mortgage is one of the most critical steps in the homebuying journey. With so many options available, it’s easy to feel overwhelmed. In this blog, we’ll break down the main types of home loans available in Central California, helping you make a smarter, more informed decision on your path to homeownership.

Why Loan Type Matters

The type of loan you choose impacts your interest rate, monthly payment, down payment, and long-term costs. Central California homebuyers often work with a mix of traditional and government-backed loan programs, each with its own advantages.

1. Conventional Loans

These are not backed by the federal government and are best for buyers with good credit (typically 620+). You’ll often need at least 5% down, though some programs allow as little as 3%. They’re ideal if you have stable income and savings.

2. FHA Loans

Federal Housing Administration (FHA) loans are perfect for first-time buyers or those with lower credit scores. With just 3.5% down and more flexible guidelines, they help many families enter the housing market.

Learn more at HUD.gov’s FHA Loans page

3. VA Loans

Available to eligible veterans and active-duty military, VA loans offer 0% down with no private mortgage insurance (PMI). These are some of the most cost-effective loans available.

Check your eligibility via VA.gov Home Loans

4. USDA Loans

For buyers in rural parts of Central California, USDA loans offer 0% down and low interest rates. You’ll need to meet income and location criteria, but this is a great option if you’re buying in areas like Coarsegold or Mariposa.

Search eligible areas on the USDA Property Eligibility Tool

Next Step: Match the Right Loan to Your Goals

Your ideal loan depends on your credit profile, location, and financial goals. Need help narrowing it down? That’s where I come in.

👉 If you haven’t already, start with my earlier post: The First Step in Buying a Home in Central California: Getting Pre-Approved for a Loan

Want help deciding which loan is right for you?
📲 Contact me today or use NerdWallet’s loan comparison tool to explore your options side-by-side.

Understanding Different Home Loan Types in Central California