Bay Area home prices can feel overwhelming for first-time buyers. The median home price across Silicon Valley regularly tops $1 million, and saving for a down payment while renting here is no small feat. But state programs like CalHFA exist for exactly this reason: to help everyday California families get into a home without waiting another decade.
What most buyers don’t realize is that you can use CalHFA financing to purchase a brand-new construction home. You don’t have to settle for an older resale property just to access state assistance. New construction homes across the Bay Area are fully eligible for CalHFA programs, and the process is more straightforward than you might think.
This guide walks you through exactly what you need to know as a Bay Area buyer:
- How CalHFA programs work for new construction homes
- Which programs offer down payment assistance
- Income limits for key Bay Area counties
- The step-by-step process from pre-approval to move-in
What Is CalHFA and Why Does It Matter for Bay Area Buyers?
The California Housing Finance Agency (CalHFA) is one of the most powerful tools available to first-time buyers in this state. Yet many Bay Area buyers overlook it, assuming they earn too much or that the program won’t stretch far enough in a high-cost market. That assumption is worth revisiting.
CalHFA at a glance
CalHFA does not lend money directly to buyers. Instead, it works through a network of CalHFA-approved lenders who qualify you for the loan. It offers 30-year fixed-rate first mortgages paired with down payment assistance programs to reduce what you need upfront. Loan types include:
- FHA
- Conventional
- VA
- USDA
CalHFA no longer sets sales price limits on eligible properties. That means there’s no cap on how much your home costs; only your income and loan type limits apply. For Bay Area buyers, that’s a significant advantage.
Income limits in this region are among the highest in California. The 2025 limits for standard CalHFA first mortgage programs are $325,000 for both Santa Clara and San Mateo counties, and $316,000 for Alameda County. Those figures reflect Bay Area salary levels, and they mean more households qualify here than in most other parts of the state.
Can you use CalHFA to buy a new construction home?
Yes, and this is where many buyers are pleasantly surprised. CalHFA financing is available for all types of properties across California, including new construction homes, condominiums, and units in planned unit developments.
To be eligible, your property must meet these core requirements:
- Located in California
- Used as your primary residence
- Zoned for single-family occupancy
- Defined as a single-family residence or an eligible condo/PUD
Homes with accessory dwelling units are also eligible. New construction homes that meet these conditions, including move-in ready communities across Silicon Valley, are fully compatible with CalHFA financing.
CalHFA Programs That Work for New Construction Buyers
CalHFA offers several loan programs, and most of them work for new construction homes. Understanding your options helps you choose the right fit before you start the pre-approval process.
CalHFA FHA loan program
The CalHFA FHA loan is a 30-year fixed-rate, government-backed mortgage. It’s a strong option for buyers who are earlier in their credit-building journey or working with a smaller down payment.
Key details at a glance:
- Minimum credit score: 640 for standard scenarios; 660 is required under manual underwriting conditions
- Down payment as low as 3.5%
- Can be paired with the MyHome down payment assistance program
- Best for buyers with lower credit scores or limited upfront savings
CalHFA conventional loan program
The CalHFA Conventional loan is a 30-year fixed-rate mortgage backed by Fannie Mae. It can be paired with the MyHome Assistance Program to help cover down payment and closing costs.
Key details at a glance:
- Minimum credit score: 680
- Down payment as low as 3%
- Best for buyers with stronger credit profiles looking for competitive rates
MyHome assistance program (down payment help)
MyHome is CalHFA’s most widely used down payment assistance program. It works as a deferred-payment “silent second” loan, meaning no monthly payments are required until you sell, refinance, or pay off the home.
Here’s how the assistance breaks down:
- Up to 3.5% of the purchase price for FHA loans; up to 3% for conventional loans
- According to JVM Lending, a simple interest rate of 1% accrues annually on the balance but is not paid monthly; it’s added to the total due at payoff
- Must be a first-time homebuyer and occupy the home as a primary residence
California Dream For All: what buyers should know
Dream For All is a shared appreciation loan that used to offer up to 20% of the purchase price as down payment assistance. The program is limited to eligible first-time homebuyers, with at least one borrower required to be a first-generation homebuyer. The portal closed on March 16, 2026, and no new applications can be started at this time. Check calhfa.ca.gov for updates on future rounds.
If a future round opens, keep these income limits in mind for Bay Area counties:
- Santa Clara County: $309,000
- San Mateo County: $295,000
These limits are lower than standard CalHFA program limits, so confirm your eligibility carefully with an approved lender before applying.
Bay Area Income Limits: Do You Qualify?
One of the biggest misconceptions about CalHFA is that Bay Area buyers earn too much to qualify. In reality, CalHFA income limits are county-specific and updated annually, and the Bay Area consistently has some of the highest limits in the state.
How CalHFA defines a first-time homebuyer
The definition is broader than most buyers expect. A first-time homebuyer is someone who has not owned and occupied their home in the last three years, and who has not lived in a home owned by a spouse in the past three years.
If you previously owned a home but sold it years ago, you may still qualify. CalHFA also uses your gross income, before taxes, to determine eligibility.
2025 income limits for key Bay Area counties
The figures below apply to standard CalHFA first mortgage and subordinate loan programs, effective June 9, 2025:
- Santa Clara County: $325,000
- San Mateo County: $325,000
- Alameda County: $316,000
- Contra Costa County: $316,000
These limits apply to your household’s total gross income. A dual-income household in San Jose earning a combined $300,000 would still fall within Santa Clara County’s limit. Always verify your specific program’s income ceiling with a CalHFA-approved lender, as limits can vary slightly between programs.
Dream For All income limits
If a future round of Dream For All opens, the income thresholds are lower than standard CalHFA programs. Borrowers must meet Dream For All’s county-specific income limits, for example, $309,000 in Santa Clara County. San Mateo County’s limit under Dream For All is $295,000.
Check calhfa.ca.gov for the most current figures before applying.
How the Process Works When Buying a New AL Home with CalHFA
Buying a new construction home with CalHFA financing involves a few more steps than a standard resale purchase. But with the right team guiding you, the process is manageable. Here’s what to expect from start to finish.
Step 1: Get pre-approved with a CalHFA-approved lender
CalHFA does not accept applications directly. You must work with a CalHFA-approved lender to qualify for a home loan. AL Homes works with TruRate, a trusted lending partner who can help you navigate CalHFA eligibility and identify the right program for your situation.
Have these documents ready before your first lender conversation:
- Government-issued ID
- Recent pay stubs and tax returns
- Bank statements
- Credit history documentation
Step 2: Choose your new home
CalHFA works for move-in ready new construction homes across California, including communities in Silicon Valley. Buying new construction through CalHFA has some distinct advantages over shopping resale inventory:
- No competing offers on the same property
- Modern, energy-efficient design built to current California codes
- Builder warranty coverage included
- New construction buyers are exempt from the standard one-year home warranty requirement under CalHFA guidelines
Browse available AL Homes communities to see move-in ready homes across the Bay Area.
Step 3: MAS reservation by your lender
Once you’re under contract, your CalHFA-approved lender must take an important step before submitting your loan. The lender must make a reservation in CalHFA’s Mortgage Access System (MAS) prior to loan submission.
For new construction properties, CalHFA allows rate lock extensions of up to 120 days total from the original expiration date. That’s double the window available for resale properties. Plan your timeline with your builder and lender early so there are no surprises.
Step 4: Complete homebuyer education
This step is required for all CalHFA first-time homebuyers. Only one occupying first-time borrower per loan transaction needs to complete the course. You have two options:
- Online: eHome’s eight-hour Homebuyer Education and Counseling course is the only online course accepted by CalHFA, with a $100 fee.
- In-person or virtual: Available through NeighborWorks America or any HUD-approved housing counseling agency.
Complete this step early. Your certificate of completion is required before your loan can close.
Step 5: Close and move in
At closing, any CalHFA subordinate loans, like MyHome, are recorded as a second lien on the property. No monthly payments are required on these loans. You simply move in and repay them when you sell, refinance, or pay off the home.
AL Homes manages the full process from design through construction, with financing coordination support via TruRate. That means you have one integrated team guiding you from eligibility check to move-in day. Learn more about how the process works.
Conclusion
CalHFA makes Bay Area homeownership more accessible than most buyers realize, especially for new construction. With income limits as high as $325,000 in Santa Clara and San Mateo counties, and down payment assistance programs that require no monthly payments, the barriers are lower than they appear.
The key is working with the right team from the start. AL Homes and TruRate are here to help you navigate every step, from checking your eligibility to closing on a brand-new home built specifically for Silicon Valley families.
Ready to explore your options? Browse our available homes or contact our team.
Frequently Asked Questions on CalHFA New Construction Homes in the Bay Area
Can you use CalHFA for new construction in California?
Yes. CalHFA-eligible properties include new construction homes across California, as long as the home is your primary residence and meets standard property requirements.
What are the income limits for CalHFA in the Bay Area?
The 2025 income limits for standard CalHFA programs are $316,000 for Alameda and Contra Costa counties, and $325,000 for Santa Clara and San Mateo counties.
What is the CalHFA Dream For All program?
Dream For All offers up to 20% of a home’s purchase price (capped at $150,000) as a shared appreciation loan. At least one borrower must be a first-generation homebuyer. The portal is currently closed. Check calhfa.ca.gov for future rounds.
Do you need to be a first-time buyer to use CalHFA?
A first-time homebuyer is someone who has not owned and occupied their home in the last three years. If you previously owned a home, you may still qualify.
How long does the CalHFA loan process take for a new construction home?
For new construction, CalHFA allows rate lock extensions of up to 120 days from the original expiration date, double the window for resale properties. Plan your timeline early with your lender and builder.
