Low Down Payment Loans Are on the Rise — Good News for CA Buyers

More homebuyers are using high-LTV loans with down payments as low as 3%, and lenders are delivering more of them — here's what that means if you're buying in California.

One trend I'm watching closely right now: lenders are approving more high loan-to-value (LTV) mortgages, and the numbers are meaningful. In Q2 2026, the share of loans delivered to Fannie Mae and Freddie Mac with LTVs between 81% and 97% hit its highest level since mid-2023.

In plain terms — more buyers are purchasing homes with down payments of less than 20%, and lenders are accommodating that. Nearly half of all purchase loans sent to the GSEs in Q2 fell into this higher-LTV category.

Why is this happening? Rising home prices in California mean that saving a full 20% down payment is increasingly out of reach for many buyers. At the same time, lenders are recognizing that qualified borrowers shouldn't have to sit out the market just because they haven't hit that threshold.

If you've been holding back because you don't have 20% saved, this is your reminder that strong loan programs exist for 3%, 5%, and 10% down scenarios — even in high-cost California markets.

Let's talk about what down payment options make sense for your situation. Reach out to our team for a no-pressure consultation today.