How Much Do You Need for a Down Payment to Buy a Home in Los Angeles in 2025?
Planning to buy a home in Los Angeles? Understanding down payment requirements is crucial for navigating one of California's most expensive real estate markets. In 2025, Los Angeles home buyers typically need between 3% and 20% down, depending on loan type, property value, and individual financial circumstances. With the median home price around $900,000, this translates to $27,000 to $180,000 upfront.
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Down Payment Requirements by Loan Type in Los Angeles
Conventional Loans
Conventional mortgages offer the most flexibility for Los Angeles buyers. First-time homebuyers can put down as little as 3%, while repeat buyers typically contribute 5-20%. These loans work well for homes under the conforming loan limit of $766,550 in Los Angeles County.
FHA Loans
Federal Housing Administration loans require just 3.5% down and accept credit scores as low as 580. For a $900,000 Los Angeles home, that's $31,500 down payment. FHA loans are popular among first-time buyers in neighborhoods like Van Nuys, Carson, and parts of Long Beach.
VA Loans
Military veterans and active service members can purchase Los Angeles homes with zero down payment through VA loans. No private mortgage insurance is required, making this an excellent option for qualifying buyers in expensive markets like LA.
Jumbo Loans
Given Los Angeles' high property values, many buyers need jumbo mortgages for loans exceeding $766,550. Jumbo loans typically require 10-20% down payments and have stricter credit requirements. These are common for homes in Beverly Hills, Manhattan Beach, Santa Monica, and other premium neighborhoods.
USDA Rural Development Loans
While rare in Los Angeles proper, some outer areas like Palmdale or Lancaster may qualify for USDA loans with zero down payment requirements.
Down Payment Examples for Different LA Price Points
$600,000 Condo in Koreatown:
3.5% FHA: $21,000
5% Conventional: $30,000
10% Down: $60,000
$900,000 Single-Family Home in Glendale:
3.5% FHA: $31,500
10% Down: $90,000
20% Down: $180,000
$1.5M Home in Pasadena:
10% Jumbo: $150,000
20% Jumbo: $300,000
How Down Payments Impact Your Los Angeles Home Purchase
Monthly Mortgage Payments
Larger down payments significantly reduce monthly costs. On a $900,000 home with a 7% interest rate, putting 20% down versus 5% down saves approximately $700 monthly.
Private Mortgage Insurance (PMI)
Buyers putting less than 20% down must pay PMI, typically 0.3-1.5% annually of the loan amount. On a $900,000 home with 5% down, expect $200-$600 monthly PMI.
Competitive Advantage
In Los Angeles' competitive market, sellers in desirable neighborhoods like Silver Lake, Echo Park, or West Hollywood often favor offers with larger down payments, viewing them as more reliable.
Appraisal Gap Coverage
Rising LA home prices sometimes result in appraisal shortfalls. Buyers with larger down payments can more easily cover gaps between appraised value and purchase price.
First-Time Homebuyer Programs in Los Angeles
California Dream for All Program
This shared appreciation loan provides down payment assistance up to 20% of home value. Buyers repay the assistance when selling or refinancing, plus a share of home appreciation.
CalHFA Programs
California Housing Finance Agency offers FHA and conventional loan programs with down payment assistance up to 3.5% of purchase price. Combined with low down payment loans, some buyers purchase homes with minimal upfront cash.
Local City Programs
Several LA area cities offer first-time buyer assistance:
City of Los Angeles: Mortgage Credit Certificate Program
Glendale: First-Time Homebuyer Program
Inglewood: Down Payment Assistance Program
Long Beach: Home Ownership Program
Employer Programs
Major LA employers like Disney, UCLA, and entertainment companies sometimes offer housing assistance programs for employees.
Strategies for Saving Your Los Angeles Down Payment
Automated Savings Plans
Set up automatic transfers to a dedicated home-buying account. For a $45,000 down payment (5% of $900,000), saving $1,250 monthly reaches your goal in three years.
Gift Funds from Family
Most loan programs allow family gifts for down payments. Proper documentation and gift letters are required. This is particularly common among LA's diverse immigrant communities where family support for homeownership is cultural.
401(k) Loans and IRA Withdrawals
First-time buyers can withdraw up to $10,000 from IRAs penalty-free. Some 401(k) plans allow loans for home purchases. Consult a financial advisor before using retirement funds.
Side Income Opportunities
Los Angeles' gig economy offers numerous income-boosting opportunities, from ride-sharing to freelance creative work, helping accelerate down payment savings.
Additional Costs for Los Angeles Home Buyers
Closing Costs
Expect 2-3% of purchase price in closing costs. For a $900,000 home, budget $18,000-$27,000 for title insurance, escrow fees, loan origination, and other expenses.
Inspection and Appraisal Fees
Professional inspections ($400-$800) and appraisals ($600-$1,200) are essential, especially for older Los Angeles homes built before modern building codes.
HOA Fees and Property Taxes
Many LA properties have homeowner association fees ($200-$800+ monthly). Property taxes average 0.75% annually, or $6,750 on a $900,000 home.
Immediate Move-in Costs
Budget for moving expenses, utility deposits, immediate repairs, and furnishing. Older LA homes often need electrical, plumbing, or HVAC updates.
Neighborhood-Specific Down Payment Considerations
Luxury Markets (Beverly Hills, Manhattan Beach, Malibu): Expect 20%+ down payments and all-cash competition.
Mid-Tier Neighborhoods (Glendale, Burbank, Culver City): 5-10% down payments are common with various loan programs available.
Entry-Level Areas (Van Nuys, Carson, parts of Downtown LA): FHA loans with 3.5% down are frequently used.
When to Put More Money Down
Consider larger down payments if you:
Want lower monthly payments
Plan to stay long-term
Have excellent credit and stable income
Are buying in highly competitive neighborhoods
Want to avoid PMI
When Smaller Down Payments Make Sense
Lower down payments work when you:
Need cash reserves for repairs or emergencies
Can invest the difference at higher returns
Are buying in an appreciating market
Qualify for assistance programs
Want to preserve liquidity
Current Market Conditions Affecting Down Payments
Interest rates in 2025 have made larger down payments more attractive by reducing monthly payments. However, continued home price appreciation means waiting to save a larger down payment might cost more than the PMI savings.
Key Takeaway for Los Angeles Home Buyers
Most Los Angeles home buyers in 2025 need between $27,000 and $180,000 for down payments, representing 3-20% of purchase price. Your specific amount depends on loan type, property price, credit score, and available assistance programs. With median home prices around $900,000, even a 5% down payment of $45,000 can open doors to homeownership.
The key is starting early, understanding your options, and leveraging available programs. Whether you're targeting a $600,000 condo in Koreatown or a $1.5 million home in Pasadena, proper planning makes Los Angeles homeownership achievable.
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Author: Justin Borges
Justin Borges is the Team Leader of The Borges Real Estate Team at eXp Realty and widely recognized as the best realtor in Los Angeles. With over a decade of experience and more than $200 million sold, Justin leads one of the top-performing real estate teams in Los Angeles County. Known for his advisor-first approach, he helps homeowners, buyers, and investors make confident real estate decisions—focusing on strategy, clarity, and long-term success rather than just transactions.
