Most San Diego buyers end up choosing between four loan programs: FHA, Conventional, VA, and Jumbo. Each has its own down payment rules, mortgage insurance treatment, loan limits, and ideal borrower profile. The right choice depends on your purchase price, credit profile, military eligibility, and how much cash you have for the down payment and closing.
The Four Main Loan Types in San Diego
Before going head-to-head, here's a snapshot of where each program sits in 2026. The four programs cover virtually every San Diego purchase scenario from a starter condo to a coastal jumbo.
Conventional Loans
Conventional loans are not backed by the federal government. They're underwritten to Fannie Mae and Freddie Mac standards and represent the largest share of mortgages nationally. Down payments can start at 3% through programs like Conventional 97 and HomeReady, and as little as 5% on standard conventional financing. Private mortgage insurance (PMI) is required when you put less than 20% down, but unlike FHA, PMI can be removed once you reach 20% equity. The 2026 conforming loan limit in San Diego County is $1,209,750.
FHA Loans
FHA loans are insured by the Federal Housing Administration and designed for buyers with lower credit scores or limited down payment savings. The minimum down payment is 3.5% with a 580 credit score, or 10% down with a 500 score. FHA charges an upfront mortgage insurance premium (UFMIP) of 1.75% plus monthly MIP that, for most loans, lasts the life of the mortgage. The San Diego County FHA limit matches the conforming limit at $1,209,750.
VA Loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs and available to eligible active-duty service members, veterans, National Guard and Reserve members, and certain surviving spouses. They require zero down payment with full entitlement, charge no monthly mortgage insurance, and have no county loan limit for borrowers with full entitlement. A one-time funding fee (1.25% to 3.3%, often financed) replaces ongoing mortgage insurance, and that fee is waived entirely for many disabled veterans.
Jumbo Loans
Any loan amount above the conforming limit ($1,209,750 in San Diego County) is a jumbo loan. Jumbo loans are not eligible for purchase by Fannie Mae or Freddie Mac, so each lender sets its own underwriting rules. Down payments typically start at 10% to 20%, credit score requirements usually start at 700 (with 720+ for the best pricing), and lenders typically ask for six to twelve months of reserves after closing.
2026 San Diego Loan Limits
The conforming and FHA limit for San Diego County in 2026 is $1,209,750 for a single-family home. VA loans have no county-level cap with full entitlement. Loan amounts above $1,209,750 require jumbo financing.
FHA vs. Conventional
This is the most common comparison San Diego buyers face, especially first-time buyers weighing low down payment options. Both programs allow down payments under 5%, but the long-term cost structure is very different.
| Feature | FHA | Conventional |
|---|---|---|
| Minimum down payment | 3.5% (580+ score) | 3% – 5% with first-time buyer programs |
| Minimum credit score | 580 typical (500 with 10% down) | 620 typical, 700+ for best pricing |
| Mortgage insurance | UFMIP 1.75% upfront + monthly MIP, usually for life of loan | PMI required under 20%, removable at 20% equity |
| Debt-to-income flexibility | Up to 50%+ with compensating factors | Typically capped around 45% – 50% |
| Property condition | Stricter FHA appraisal standards | Standard appraisal, fewer condition triggers |
| 2026 San Diego limit | $1,209,750 | $1,209,750 (above this is jumbo) |
The decision usually comes down to credit and time horizon. Buyers with credit scores below 620 or stretched debt ratios will often qualify for FHA when conventional turns them down. Buyers with stronger credit who plan to stay in the home long enough to remove PMI typically save more with conventional financing.
VA vs. FHA
For eligible borrowers, the VA loan is almost always the stronger economic choice. The comparison is worth running anyway because some property types (certain condos, fixer-uppers, properties that fail VA appraisal standards) work better under FHA.
| Feature | VA | FHA |
|---|---|---|
| Eligibility | Active duty, veterans, certain surviving spouses | Open to any qualifying borrower |
| Minimum down payment | $0 with full entitlement | 3.5% |
| Mortgage insurance | None (one-time funding fee instead) | UFMIP + monthly MIP, usually for life of loan |
| Funding fee / upfront cost | 1.25% – 3.3%, can be financed; waived for many disabled veterans | 1.75% upfront MIP, financed into the loan |
| Loan limits | No county limit with full entitlement | $1,209,750 in San Diego County |
If You're VA Eligible, Start There
Zero down, no monthly mortgage insurance, and no county loan limit with full entitlement is a benefit no civilian loan can match. Run the FHA comparison only after confirming the VA path doesn't work for your specific property.
Conventional vs. Jumbo
San Diego's pricing pushes a meaningful share of buyers across the conforming threshold. Whether you finance the same home with a conventional or jumbo loan changes underwriting requirements, reserve requirements, and pricing.
| Feature | Conventional | Jumbo |
|---|---|---|
| Loan amount | Up to $1,209,750 in San Diego | Above $1,209,750 |
| Minimum down payment | 3% – 5% common | 10% – 20% common, sometimes more |
| Minimum credit score | 620 typical | 700+ typical, 720+ for best pricing |
| Reserves | 0 – 2 months commonly required | 6 – 12 months commonly required |
| Underwriting | Standardized via Fannie Mae / Freddie Mac | Set by each portfolio lender, more documentation |
One strategy worth considering: if your purchase price is just above the conforming limit, a slightly larger down payment can keep your loan amount conforming and avoid jumbo pricing and reserve requirements entirely. The math doesn't always favor it, but it's worth running both scenarios.
San Diego Price Point Strategy
San Diego's median home price sits in a range that pushes buyers across loan-program boundaries depending on neighborhood. Where your purchase price falls often narrows your realistic options before any other factor.
Under $600,000
FHA, Conventional, and VA are all viable. At lower price points the loan amount is well inside every program's limits, so the choice comes down to credit, down payment, and VA eligibility rather than the home price itself.
$600,000 – $1,000,000
This is the meat of San Diego's market. Conventional or VA usually wins the long-term cost comparison. FHA still works but the lifetime MIP cost adds up significantly over a typical hold period, so it makes sense mainly for buyers who couldn't qualify conventionally.
$1,000,000 – $1,275,000
You're at the conforming threshold. Stay under $1,209,750 with your loan amount and you keep conventional pricing. A larger down payment can be the difference between conforming and jumbo financing, so it's worth running both scenarios with a lender.
$1,275,000 and Up
Loans above the conforming limit need jumbo financing — or VA, for eligible buyers with full entitlement, since VA has no county cap. This is the price band where coastal, North County, and luxury San Diego purchases concentrate.
Conforming Limits Change Annually
The Federal Housing Finance Agency adjusts conforming loan limits each year based on home-price trends. The San Diego County figures here are 2026 numbers — verify current limits with your lender before locking a rate, especially around the year-end transition.
How to Choose
The right loan is rarely about a single feature in isolation. Walk through these questions in order — each one narrows the field.
- Are you VA eligible? If yes, VA is almost always the best loan available to you. Compare alternatives only if you're using VA on a property that doesn't qualify or if a specific scenario tilts the math.
- Is your purchase price above the conforming limit? Above $1,209,750 in San Diego, your options narrow to jumbo (or VA with full entitlement). Below that, all four programs are on the table.
- What's your credit profile? Below 620 typically points toward FHA. 620 to 700 opens conventional with mortgage insurance. 700+ unlocks the best conventional and jumbo pricing.
- How much can you put down comfortably? 3% to 5% pushes toward Conventional 97 or FHA. 10% to 20% opens conventional with manageable PMI. 20%+ removes PMI on conventional and unlocks jumbo at competitive rates.
- How long do you plan to keep the loan? If you'll refinance or sell within a few years, the lifetime cost of FHA's MIP matters less than rate and closing costs. For a long hold, conventional with removable PMI usually wins.
- How does the property appraise? FHA and VA have stricter appraisal standards. Older homes, fixer-uppers, and properties with deferred maintenance often work better with conventional financing.
What This Page Doesn't Replace
A comparison page can frame the trade-offs, but it can't price out your specific scenario. Real loan decisions also depend on the rate environment on the day you lock, lender-specific overlays on top of program guidelines, your debt-to-income ratio after the new payment, your property type and intended occupancy, and any HOA dues or special assessments tied to the home.
Once you've narrowed your shortlist using this page, request a quote from a licensed mortgage professional. They'll run the actual numbers on your scenario and confirm which programs you qualify for — often there's more than one workable answer, and the cheapest one isn't always obvious until you see them side-by-side at today's rates.