Homeownership in San Diego Is Within Reach: Strategies for Affording Your First Home in 2026
With a median home price hovering around $875,000 and the average single-family home commanding over $900,000, buying a home in San Diego can feel like an impossible dream—especially for first-time buyers navigating high inflation and elevated interest rates. The numbers can be overwhelming. But here's what I've learned after more than 20 years helping buyers throughout San Diego County: homeownership is more achievable than the headlines suggest. It takes the right strategy, proper guidance, and a willingness to think creatively.
If you've been sitting on the sidelines wondering if you'll ever be able to afford a home in America's Finest City, this guide is for you. Let's explore the programs, loan products, and strategies that are helping everyday San Diegans become homeowners right now.
Downtown San Diego
The Reality Check: Yes, It's Challenging—But Not Impossible
Let's start by acknowledging the elephant in the room. San Diego is one of the most expensive housing markets in the country. The average down payment in our county hovers around $85,000, making us one of the highest in the nation. Combined with interest rates in the low 6% range and persistent inflation impacting everyday expenses, it's no wonder many potential buyers feel discouraged.
But here's what those statistics don't tell you: thousands of San Diegans are successfully buying homes every month. They're not all making six figures. They're not all receiving family gifts or inheritances. Many are using a combination of available programs, strategic loan products, and creative approaches that most people don't even know exist.
The key is education and partnership with professionals who understand the full spectrum of options available to you.
Down Payment Assistance Programs: Money You Didn't Know Was Available
One of the best-kept secrets in San Diego real estate is the variety of down payment assistance programs designed specifically for first-time homebuyers. These aren't gimmicks—they're legitimate government-funded programs created to help working families achieve homeownership.
San Diego Housing Commission First-Time Homebuyer Program
The SDHC offers low-income first-time homebuyers a deferred-payment loan of up to 19% of the purchase price for down payment assistance, plus up to $10,000 in closing cost assistance. The best part? You don't make payments on this loan until you sell, refinance, or move out of the home. For buyers earning no more than 80% of San Diego's Area Median Income, this program can be transformative.
Middle-Income Program
Even if you're earning between 80% and 150% of the area median income, you may qualify for a $40,000 deferred down-payment assistance loan and a $10,000 closing costs assistance grant through the SDHC's Middle-Income Program funded by Wells Fargo Foundation.
County of San Diego Programs
The County offers up to 22% of the purchase price in down payment assistance for low-income buyers, plus up to $10,000 for closing costs. Moderate-income buyers (up to 120% of AMI) can receive up to 17% of the purchase price. These funds come as deferred loans at just 3% interest, with no payments until you sell or refinance.
CalHFA MyHome Program
California's state program offers a silent second loan of 3.5% of the purchase price with no interest and no payments until sale or refinance. This can be combined with other programs for even greater assistance.
FHA Loans: Lower Barriers to Entry
Federal Housing Administration loans remain one of the most accessible paths to homeownership, particularly for buyers with limited savings or imperfect credit histories.
What Makes FHA Loans Attractive:
FHA loans require as little as 3.5% down payment with a credit score of 580 or higher. Even buyers with scores between 500-579 may qualify with a 10% down payment. The debt-to-income requirements are more flexible than conventional loans, and sellers can contribute up to 6% toward your closing costs.
For San Diego, the 2025 FHA loan limit for a single-family home is $1,149,825—covering a substantial portion of our market. This means you could potentially purchase a home valued at over $1.1 million with just 3.5% down.
The Trade-Off
FHA loans require mortgage insurance (both upfront and monthly), which adds to your payment. However, for many buyers, this trade-off is well worth gaining access to homeownership sooner rather than waiting years to save a larger down payment.
VA Loans: Honoring Those Who Serve
If you're an active-duty service member, veteran, or eligible surviving spouse, VA loans offer what is arguably the most generous financing option available anywhere.
Zero Down Payment
VA loans require absolutely no down payment. You can finance 100% of the home's purchase price, making homeownership accessible even if you haven't accumulated significant savings.
No Private Mortgage Insurance
Unlike FHA and conventional loans with less than 20% down, VA loans don't require ongoing mortgage insurance payments—a savings of hundreds of dollars monthly.
Competitive Interest Rates
VA loans typically offer rates below conventional loan averages because the government backing reduces lender risk.
Flexible Qualification
The VA doesn't set a minimum credit score (though individual lenders typically require 620-640), and debt-to-income ratios can be more flexible.
With multiple military installations in San Diego County—including Naval Base San Diego, Marine Corps Air Station Miramar, and Camp Pendleton nearby—this benefit is particularly relevant for our community.
House Hacking: Let Your Home Pay for Itself
Perhaps the most powerful strategy for achieving affordable homeownership in a high-cost market like San Diego is house hacking. This approach transforms your home from pure expense into an income-generating asset.
What is House Hacking?
At its simplest, house hacking means living in one part of your property while renting out another part to generate income that offsets your mortgage payment—and potentially generates profit.
The Multi-Family Approach
Purchasing a duplex, triplex, or fourplex allows you to live in one unit while renting the others. Properties with up to four units are still classified as "residential," meaning you can use owner-occupied financing with low down payments.
Here's an example: Purchase a duplex for $700,000 using an FHA loan with 3.5% down ($24,500). Your mortgage payment might be approximately $4,500 monthly. If the second unit rents for $2,500-3,000, your effective housing cost drops to $1,500-2,000—significantly more affordable than renting a comparable apartment in San Diego.
The ADU Strategy
Another approach is purchasing a single-family home with potential for an Accessory Dwelling Unit (ADU). California's ADU-friendly laws make it easier than ever to add a legal rental unit to your property. A HELOC can help fund construction, and the rental income can help pay down the loan.
The Roommate Approach
The simplest version of house hacking is renting out spare bedrooms in your single-family home. In areas near colleges, military bases, or job centers, room rentals can generate $800-1,500+ per room monthly.
The Long-Term Wealth Building
Beyond making homeownership affordable today, house hacking accelerates wealth building. You're building equity in a property while tenants help cover your costs. Many successful real estate investors started exactly this way, eventually converting their house hack into a full rental property when they purchased their next home.
Putting It All Together: Your Path Forward
The path to homeownership in San Diego isn't a single strategy—it's often a combination of approaches tailored to your unique situation. Here's what I recommend:
Start by pulling your credit (free at AnnualCreditReport.com) and understanding where you stand. Get pre-approved to know your actual purchasing power. Research down payment assistance programs—you might qualify for more than you think. Consider all loan options, including FHA and VA if eligible. Think creatively about property types, including multi-family homes for house hacking potential.
Most importantly, work with professionals who understand the full spectrum of options available. As both a real estate broker and mortgage lender, I can help you see the complete picture and craft a strategy that makes homeownership a reality for your family.
A Note of Gratitude
After more than 20 years serving San Diego families, I remain grateful for the trust my clients place in me during one of life's most significant decisions. Whether you're ready to buy tomorrow or just beginning to explore your options, I'm here to help guide you with honest information and genuine care for your success.
The dream of homeownership in San Diego is alive and well. It may look different than it did a generation ago, but with the right strategies and proper guidance, it's absolutely achievable. I've seen it happen hundreds of times, and I'd love to help make it happen for you.
Ready to explore your options? Reach out for a no-pressure consultation. Let's discuss your unique situation and build a roadmap to get you home.
Tiana Uribe is the owner and broker of TRU Financial Services, Inc., a boutique real estate and mortgage brokerage serving San Diego County for over 20 years. Contact her at 619-520-8810 or tiana.uribe@trufinancialservices.com.
