What Are the Different Types of Home Loans Available to San Diego Buyers?

Not All Mortgages Are Created Equal

Choosing the right loan type is one of the most financially significant decisions you will make as a San Diego home buyer. The loan type affects your down payment, monthly payment, qualifying requirements, and total cost of borrowing over the life of the loan.

Conventional Loans

Conventional loans are not government-backed and are offered by private lenders. They require a minimum 3 to 5 percent down for first-time buyers and 20 percent to avoid PMI. San Diego's conforming loan limit is significantly higher than the national standard, allowing larger loan amounts under conventional terms without requiring jumbo financing.

FHA Loans

FHA loans are insured by the Federal Housing Administration and allow down payments as low as 3.5 percent with a credit score of 580 or above. They have more flexible qualifying standards than conventional loans. The trade-off is mandatory mortgage insurance for the life of the loan if you put down less than 10 percent.

VA Loans

• Available to eligible active duty service members, veterans, and surviving spouses
• No down payment required — 100 percent financing
• No private mortgage insurance required
• Competitive interest rates often below market
• VA Funding Fee applies but can be waived for disabled veterans
• Particularly valuable in San Diego given the large military community at Camp Pendleton, Naval Base San Diego, and MCAS Miramar

Jumbo and Non-Conforming Loans

For purchase prices above the conforming loan limit — common in San Diego's coastal communities — jumbo loans are required. These typically require 10 to 20 percent down, strong credit of 700 or above, and significant cash reserves. Rieder Homes Group can connect you with lenders specializing in San Diego jumbo financing.

Related Reading on RiederHomes.com:

→ Blog #2: Mortgage Pre-Approval

→ Blog #10: VA Loans for San Diego Military

→ Blog #11: FHA Loans San Diego

→ Blog #12: Jumbo Loans San Diego

— Mance Rieder, Broker Associate | Rieder Homes Group | REAL Broker | riederhomes.com | 858-295-0556