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Nick Nagy · First-time home buyers

Nick Nagy Helps First-Time Buyers Compare Every California Option

A 3 percent down conventional option and a 3.5 percent down FHA option, compared on your actual file.

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The answer

The direct answer

A first-time buyer in California has more than one path in. Fannie Mae’s 97 percent loan-to-value program allows as little as 3 percent down on a 1-unit primary residence. FHA allows 3.5 percent down on 1 to 4 units. Nick Nagy compares both against a buyer’s actual file before recommending one, including any down payment assistance that might pair with it.

What I tell people first

The mistake I see most is a first-time buyer assuming they need 20 percent down before they can even start. Most never needed that much in the first place. That one assumption keeps good buyers renting years longer than they had to, waiting to save an amount the file never required.

Who this page is for

This page is for someone buying their first home in California who wants to see every realistic loan option before picking one. You want the real menu, not just the loan a lender mentions first, and a clear read on what down payment you actually need, given your own credit and savings.

The fact this page stands on
Fannie Mae’s 97 percent loan-to-value program allows as little as 3 percent down for an eligible first-time buyer on a 1-unit primary residence.
Source
Fannie Mae, 97 percent Loan to Value Options, singlefamily.fanniemae.com, read September 6, 2026.
Last verified
September 6, 2026
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Nick Nagy, mortgage broker and loan officer at Loan Factory
Nick Nagy NMLS #314880 · CA DRE #01444600 · Loan Factory, Inc. · 23 years About Nick · Licences, verified at source · Text 916-805-1933

Part of the Nick Nagy pages on go.homeaccesslist.com, and of the California Mortgage Answer Desk.

How it works

The 3 percent down conventional option

Fannie Mae’s 97 percent loan-to-value program lets an eligible first-time buyer put down as little as 3 percent on a 1-unit primary residence, per Fannie Mae.

This program requires Desktop Underwriter approval and a mortgage fixed for the life of the loan, with a maximum 30-year term.

Reserves required by Desktop Underwriter may be gifted in some cases, which can help a buyer who has the income to qualify but limited savings beyond the down payment itself.

This program is built specifically for first-time buyers and buyers refinancing an existing Fannie Mae loan, not for every conventional purchase.

The detail that matters

The FHA option

FHA allows a down payment as low as 3.5 percent of the purchase price, per HUD, and works on properties with 1 to 4 units.

FHA can fit a buyer whose credit history is still building, since its guidelines differ from a standard conventional file.

A 1 to 4 unit FHA purchase also lets a first-time buyer live in one unit and rent the others, which is not an option under most conventional first-time programs.

This is one of the more overlooked paths into homeownership for a first-time buyer who is comfortable managing a small rental alongside their own unit.

How it works

Stacking down payment assistance on top

California’s MyHome Assistance Program can pair with either an FHA or conventional first mortgage, offering a deferred junior loan toward the down payment or closing costs, per CalHFA.

Eligibility depends on meeting CalHFA’s income limits and completing a required homebuyer education course.

Stacking a junior loan on top of a 3 percent or 3.5 percent first mortgage can bring a buyer’s out-of-pocket cash to close down significantly, depending on the specific programs involved.

The detail that matters

What counts as a first-time buyer

Most California and federal first-time buyer programs use a specific definition, not simply someone who has never bought a home in their own name before. A lender confirms which definition applies to a specific program.

Some programs count a buyer as first-time again after several years without owning a home, even if they owned one previously. The exact rule varies by program.

This definition question comes up often enough that it is worth confirming before a buyer assumes they do or do not qualify for a specific program.

How it works

Comparing the options on your own file

The right program depends on your credit profile, your available down payment, and the property type you are buying. Nick Nagy compares all three paths against your actual numbers before recommending one.

A side-by-side comparison, run on your real file rather than a generic example, is what actually answers which option fits.

That comparison also flags whether a specific market, like Murrieta or the San Gabriel Valley, changes which program makes more sense given local loan limits.

Compare my first loan 237 lenders, one file, no second application.
Files like these

Three files, and what changed the answer

A first-time buyer with 3 percent saved

A buyer has 3 percent of the purchase price saved and steady income. Fannie Mae’s 97 percent loan-to-value program gets checked against an FHA file on the same numbers.

A first-time buyer who qualifies for CalHFA MyHome

A buyer’s income falls under CalHFA’s limits. Their file gets checked for MyHome eligibility to see whether the junior loan can cover part of the down payment.

A first-time buyer confused about the definition

A buyer assumes they no longer qualify as first-time because of a home owned years ago. The specific program definition gets checked before ruling anything out.

None of these is a promise about your file. They are shapes. The number on your own file comes from running it, which is the point of the form on this page.

Where it goes wrong

The mistakes, and none of them is the buyer

More about Nick

The rest of the Nick Nagy pages

Every question on the desk sits at the California Mortgage Answer Desk. Run your own numbers at nickfunds.com.
Nick Nagy, mortgage loan originator, Loan Factory, Inc.
Who answers

Nick Nagy

23 years in California lending · NMLS 314880 · CA DRE 01444600 · Loan Factory, Inc.

Dual licensed, so the loan side and the real estate side of a move get looked at as one problem instead of two. Most of what goes wrong in a move is a timing problem wearing a financing costume, and it is cheaper to catch it before you write an offer than after.

Financing is placed through Loan Factory, Inc. Real estate work is under CA DRE 01444600. More about Nick.
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The desk behind the file

One file, 237 lenders competing for it, and a broker who has done this for 23 years.

Loan Factory, Inc. is the brokerage. These are its published figures.

20,907+Loan Factory Google reviews
5.0Loan Factory average rating
237Lenders available through Loan Factory
48States Loan Factory is licensed in

A retail bank has one guideline book. A broker shops the same file across the shelf and finds the lender whose box it already fits.

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Straight answers

Questions people here actually ask

The follow-on questions, answered in the order they get asked.

Does Nick Nagy work with first-time home buyers?

Yes. Nick Nagy compares conventional, FHA, and down payment assistance options for first-time California buyers.

What is the smallest down payment for a first-time buyer in California?

Fannie Mae’s 97 percent loan-to-value program allows as little as 3 percent down on a 1-unit primary residence, per Fannie Mae.

Can a first-time buyer use FHA in California?

Yes. FHA allows a down payment as low as 3.5 percent of the purchase price, per HUD.

Can down payment assistance stack with a first-time buyer loan?

Yes, in some cases. California’s MyHome Assistance Program can pair with an FHA or conventional first mortgage, per CalHFA, subject to income limits.

Does Nick Nagy offer home loans beyond first-time buyer programs?

Yes. He works FHA, conventional, self-employed, and DSCR files across Southern California.

Ask a question that is not on this page
The person, not a call center

Talk to Nick Nagy directly

Text 916-805-1933, or send the situation through the form below. I read every one myself.

Mortgage loan originator, NMLS 314880, and licensed real estate salesperson, CA DRE 01444600, both under Loan Factory, Inc. 20,907+ Google reviews · 5.0 average · 237 lenders, the company's own published figures.

Text Nick at 916-805-1933 Or use the form below. No credit pull to start.
Your own file

Ask Nick directly, not a call center

Tell me the situation in plain English. If your file changes anything on this page, I will run it on your actual numbers. Private, no obligation, and nothing is published or shared.

    What happens after you send it
  1. You send the situation. Your question, a number to reach you, and one line about where you are. No credit pull, no documents, nothing published.
  2. Nick reads it himself. Your file goes against the programs that apply, shopped across 237 lenders through Loan Factory, not one bank's guideline book.
  3. You get the number and keep it. A straight answer on what your file supports and what it does not. If waiting is the better move, that is the answer you get, and the numbers are yours either way.
Where are you right now?

No credit pull to start · No obligation · The written answer is yours to keep

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Fannie Mae’s 97 percent Loan to Value Options singlefamily.fanniemae.com/originating-underwriting/mortgage-products/97-loan-value-options