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Resource Guide

Property Types and Down Payments in California

The same borrower needs different money down for a condo, a duplex, and a rental. Here is the map: what each property type requires across the major loan programs, and the strategies hiding inside the rules.

Primary residences: the friendliest tier

Single-family homes get the best terms everywhere: from 0% down (VA) through 3% (conventional first-time) and 3.5% (FHA). Condos match those down payments but add a second approval: the HOA itself is underwritten for budget health, owner-occupancy, insurance, and litigation. A great borrower can be sunk by a troubled association, so condo offers should be pre-screened at the building level, which Jackie does before you write.

2-4 units: the house hacker's tier

Buy a duplex, triplex, or fourplex, live in one unit, and the property is still a primary residence, with FHA at 3.5% down and conventional options available, while the other units' rent helps you qualify. It is the most powerful wealth-building structure in residential lending, and Southern California's ADU boom keeps expanding it: the Oceanside case study shows a refinance built around two ADUs.

Second homes and investment property: the equity tier

Second homes generally start at 10% down conventional with occupancy rules attached. Investment property typically wants 15 to 25% down conventionally, and here non-QM often wins: DSCR loans qualify on the property's rent instead of your tax returns, usually from 20 to 25% down, with LLC vesting available. Jumbo-sized properties in either tier layer jumbo guidelines on top.

Frequently asked questions

Can I use gift funds for the down payment?
On primary residences, yes, across FHA, VA, and conventional with a simple gift letter and paper trail. Investment property generally requires your own funds, though non-QM programs vary. Structure the transfer before escrow to keep underwriting clean.
Do condos really cost more to finance?
Rates can price slightly higher at low down payments and HOA dues reduce buying power in qualification, but the bigger risk is association health. A questionnaire review before offering costs nothing and prevents the classic mid-escrow surprise.
What counts as a second home versus a rental?
Occupancy intent, distance, and usage patterns. Calling a rental a second home to save on down payment is occupancy fraud, and lenders check. The good news: honest investor financing through DSCR is often easier than people fear.

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