San Diego’s stunning coastline, perfect weather, and vibrant neighborhoods make it one of California’s most desirable places to live—and also one of its most challenging housing markets to break into. I’m David Martinez, and while my primary office is in Pasadena, I’ve been helping clients navigate Southern California real estate markets, including San Diego County, for over two decades.
Let me tell you, the journey to homeownership in San Diego has its unique challenges, but it’s far from impossible—especially when you know which assistance programs can give you that crucial financial boost. As we move through 2025, there are more options than ever for first-time buyers in America’s Finest City.
The San Diego Housing Reality Check: What First-Time Buyers Are Facing in 2025
Before diving into specific programs, let’s talk about what you’re up against in today’s San Diego market. The median home price in San Diego County is hovering around $925,000 as of early 2025—significantly higher than the national average but actually showing some moderation compared to the peak we saw in 2023.
What does this mean for first-time buyers? A conventional 20% down payment would be 18,500-200,000 in cash to get started the traditional way.
But here’s where I see a ray of hope: interest rates have stabilized somewhat, inventory has improved slightly in certain neighborhoods, and—most importantly—there are numerous assistance programs specifically designed to help San Diegans overcome these hurdles.
My wife Elena, who works in mortgage lending, reminds me that the gap between renting and owning in San Diego remains substantial. The average two-bedroom apartment rental now exceeds 5,200. That’s a significant jump, which is precisely why these assistance programs are so vital.
San Diego-Specific First-Time Buyer Programs for 2025
Let’s start with programs exclusive to San Diego County residents, as these often provide the most substantial benefits:
1. San Diego Housing Commission First-Time Homebuyer Program
This flagship local program has been revamped for 2025 with increased funding and expanded eligibility. Here’s what you need to know:
- Assistance amount: Deferred loans up to 70,000 in previous years)
- Income limits: Up to 120% of Area Median Income (AMI), which translates to approximately $126,000 for a household of four in 2025
- Eligible properties: Single-family homes, condos, townhomes, and manufactured homes within San Diego city limits
- Interest rate: 3% simple interest, deferred until sale, refinance, or 30 years
- Occupancy requirement: Must be your primary residence for at least 15 years
What makes this program particularly valuable is that it can be combined with certain state and federal programs for even greater assistance. I recently helped a nurse and her family purchase their first home in Serra Mesa using this program combined with a conventional mortgage. The 25,000 of their own funds for the down payment on a $675,000 townhome.
The catch? Funding is limited and there’s typically a waiting list. I recommend my clients get on this list as soon as they start their home search, not when they find a property they like.
2. County of San Diego HOME Program
For those looking outside the City of San Diego but still within the county, this program offers:
- Assistance amount: Up to $120,000 in 2025 (a significant increase from previous years)
- Form of assistance: 3% interest deferred payment loan
- Income limits: Up to 80% AMI ($90,300 for a family of four in 2025)
- Target areas: Unincorporated areas of San Diego County and the cities of Coronado, Del Mar, Imperial Beach, Lemon Grove, Poway, and Solana Beach
This program works particularly well in the more affordable areas of the county like Lemon Grove, where your dollar stretches further. I helped a young couple purchase their first home there last summer—a charming 3-bedroom for 800,000+ in coastal communities.
3. Chula Vista First-Time Homebuyer Program
Chula Vista, San Diego’s second-largest city, offers its own assistance program that’s worth considering if you’re open to this growing area:
- Assistance amount: Up to $80,000
- Form of assistance: 0% interest loan, deferred for 30 years or until sale/refinance
- Income limits: Up to 80% AMI
- Property requirements: Must be within Chula Vista city limits
Chula Vista represents one of the better values in San Diego County, with newer developments and improving amenities. The eastern parts of the city offer particularly good value for first-time buyers, with newer construction and strong community planning.
Between you and me, I’ve been increasingly steering my San Diego clients toward Chula Vista over the past few years. The combination of relatively newer housing stock, the Blue Line trolley extension, and this generous assistance program makes it a smart play for first-time buyers.
California State Programs Available to San Diego Residents
Beyond local options, several California-wide programs work well for San Diego buyers:
4. CalHFA MyHome Assistance Program
The California Housing Finance Agency’s MyHome program has been a game-changer for many of my San Diego clients:
- Assistance amount: Up to 3.5% of the purchase price or appraised value
- Form of assistance: Deferred payment subordinate loan
- Interest: Zero interest
- Repayment: Deferred until the home is sold, refinanced, or paid in full
- Income limits: Varies by county, but approximately $180,000 for most San Diego areas in 2025
- Maximum purchase price: $1,089,300 in San Diego County for 2025
What’s great about this program is that it works with both FHA and conventional loans, giving buyers flexibility. The income limits are also reasonably high for San Diego, allowing moderate-income professionals to qualify.
I recently worked with a software developer who was able to use this program to buy a condo in the Hillcrest neighborhood—an area he thought was completely out of reach. The 3.5% assistance made the difference between continuing to rent and building equity in one of San Diego’s most walkable communities.
5. CalHFA Dream For All Shared Appreciation Loan
This innovative program returned with expanded funding for 2025 after a successful initial run:
- Assistance amount: Up to 20% of the purchase price
- Form of assistance: Shared appreciation loan
- Repayment: When you sell or refinance, you repay the original loan amount plus a percentage of your home’s appreciation equal to the assistance percentage
- Income limits: Up to 150% of AMI in San Diego County (approximately $169,000 for a family of four)
- Property eligibility: Single-family homes, condos, and planned unit developments in California
This program is particularly valuable in San Diego’s appreciating market, as it allows buyers to get in with minimal down payment of their own. The trade-off is sharing some of your future appreciation, but many of my clients find this preferable to waiting years to save a traditional down payment while prices continue to rise.
6. CalVet Home Loans
For San Diego’s substantial military and veteran population, CalVet loans often beat even VA loans:
- Down payment requirement: As low as 3%
- Competitive interest rates: Often lower than conventional market rates
- Funding fee: Lower than VA funding fees for many veterans
- Added benefits: Disaster insurance included at no additional cost
With Naval Base San Diego, Marine Corps Air Station Miramar, and numerous other military facilities, San Diego has one of the largest concentrations of military personnel and veterans in the country. CalVet loans are often overlooked in favor of VA loans, but they can offer better terms for many California veterans.
When I drive through neighborhoods like Tierrasanta or Mira Mesa that have traditionally been popular with military families, I’m reminded of how programs like CalVet have helped generations of service members put down roots in San Diego.
Federal Programs That Work Well in San Diego
Several federal programs can be particularly effective in San Diego’s unique market:
7. FHA Loans with Down Payment Assistance
FHA loans remain popular with San Diego first-time buyers, especially when combined with local assistance:
- Down payment requirement: As low as 3.5%
- Credit score minimum: 580 (though many lenders prefer 620+)
- Loan limits: $1,089,300 for single-family homes in San Diego County for 2025
- Mortgage insurance: Required for the life of the loan in most cases
The high FHA loan limits in San Diego County make these loans more useful here than in many other markets. They can be combined with several of the down payment assistance programs mentioned earlier, creating powerful financing packages.
One important note about FHA loans in San Diego: they work better for single-family homes and certain townhomes than for condos. Many San Diego condo complexes aren’t FHA-approved, which can limit your options. My office maintains a list of FHA-approved condo buildings throughout San Diego to help our clients navigate this challenge.
8. HomeReady and Home Possible Conventional Loans
These Fannie Mae and Freddie Mac programs offer:
- Down payment requirement: As low as 3%
- Reduced mortgage insurance costs
- Income limits: Up to 80% of AMI, but with exceptions for underserved areas
- Flexible sources of funds: Allows gifts, grants, and Community Seconds®
These programs work particularly well in San Diego’s “transitional” neighborhoods—areas that are improving but haven’t yet seen dramatic price increases. Places like parts of City Heights, Encanto, and National City can be good targets for these programs.
9. Good Neighbor Next Door Program
For teachers, law enforcement officers, firefighters, and EMTs, this HUD program offers:
- Discount: 50% off the list price of homes in revitalization areas
- Down payment: As little as $100
- Requirement: Must commit to living in the home for at least 3 years
While inventory through this program is limited, when homes do become available, they represent extraordinary opportunities. I helped a San Diego elementary school teacher purchase a home in Golden Hill through this program in 2023, and she’s still pinching herself about the deal she got.
Neighborhood-Specific Opportunities in San Diego
San Diego’s diverse neighborhoods offer varying opportunities for first-time buyers. Here’s where I’m seeing the best options in 2025:
South Bay Communities
Chula Vista, National City, and Imperial Beach offer some of the best values in the county, with median prices significantly lower than coastal or central neighborhoods. These areas also have multiple assistance programs available, including city-specific options.
The Blue Line trolley extension has made commuting from these areas much more feasible, increasing their appeal. I’ve noticed particular value in eastern Chula Vista, where newer developments offer modern amenities at relatively reasonable price points.
Mid-City Neighborhoods
City Heights, Normal Heights, and parts of North Park still offer relative values with improving amenities. These neighborhoods have seen significant investment in recent years but remain more affordable than nearby communities like Hillcrest or South Park.
These areas often qualify for additional assistance through programs targeting community revitalization. A first-time buyer client of mine recently purchased a charming Spanish-style bungalow in Normal Heights using a combination of CalHFA assistance and a local program targeting this specific area.
East County Options
La Mesa, Spring Valley, and El Cajon provide more house for your money while still offering reasonable commutes to major employment centers. These areas have seen slower price appreciation than coastal communities, creating opportunity for first-time buyers.
East County also tends to have newer housing stock in certain developments, reducing the risk of major repair costs that can strain new homeowners’ budgets. My clients who are prioritizing space over proximity to the coast often find excellent values in these communities.
Creative Strategies for San Diego First-Time Buyers
Beyond traditional assistance programs, I’ve helped my San Diego clients use several creative approaches:
Co-Buying Arrangements
With San Diego’s high prices, co-buying with friends or family members has become increasingly common. I’ve helped structure these arrangements to protect all parties, including:
- Creating tenancy-in-common agreements with defined ownership percentages
- Establishing “exit strategy” provisions in case one party wants to sell
- Setting up joint maintenance funds for unexpected repairs
One successful example: three teachers who pooled their resources to purchase a three-bedroom townhome in University Heights that none could have afforded individually. They’ve now built substantial equity together over the past four years.
Rent-to-Own Programs
Several new rent-to-own platforms are operating in San Diego, allowing you to rent a home while building equity toward a future purchase. Companies like Divvy Homes and ZeroDown have expanded their San Diego operations in 2025.
These programs typically require:
- 1-5% of the home value upfront (much less than a traditional down payment)
- Slightly above-market rent, with a portion going toward your future down payment
- A commitment to purchase within 3-5 years
While these programs charge a premium for their services, they can be effective bridges for those who need time to improve credit scores or save additional funds while securing a property they love.
Accessory Dwelling Unit (ADU) Potential
San Diego’s progressive ADU laws make buying a property with ADU potential a smart strategy for first-time buyers. Recent zoning changes allow for:
- Multiple ADUs on many single-family lots
- Reduced fees for ADU construction
- Streamlined permitting processes
I’ve worked with several young professionals who purchased older homes in areas like College Area or Clairemont with the specific intention of adding an ADU to help offset their mortgage. The rental income from an ADU can often cover 30-50% of a monthly mortgage payment.
Common Challenges for San Diego First-Time Buyers (And How to Overcome Them)
Despite the many assistance programs available, San Diego buyers face some unique challenges:
Competition From Cash Buyers
San Diego attracts significant investment from both domestic and international buyers who can make cash offers. To compete:
- Get fully underwritten pre-approval, not just pre-qualification
- Consider “cash-backed” offer programs from companies like Ribbon or Accept.inc
- Be flexible on closing timelines and contingencies
- Look in neighborhoods slightly off the beaten path
I recently helped a young couple win a competitive situation in Kensington against a cash offer by providing the seller with a 21-day close guarantee and minimal contingencies. Their solid financing and flexibility on the move-in date ultimately won the day despite offering $15,000 less than the cash buyer.
Condo HOA Challenges
Many San Diego first-time buyers focus on condos as entry points, but HOAs can present unique issues:
- High monthly fees (often $350-600)
- Special assessments for building repairs
- FHA approval status (many aren’t approved)
- Rental restrictions that limit future flexibility
When working with clients interested in condos, I always review the HOA documents thoroughly, looking for adequate reserves, reasonable fee structures, and any planned special assessments. This due diligence has saved several clients from buying into problematic associations.
Coastal Zone Restrictions
If you’re dreaming of a coastal property, be aware of California Coastal Commission regulations that can restrict renovations and additions. Communities like Ocean Beach, Pacific Beach, and parts of La Jolla have additional layers of approval required for even minor changes.
One of my clients purchased a fixer-upper in Ocean Beach only to discover that the renovation plans they’d envisioned would require Coastal Commission approval—adding months to their timeline and thousands to their budget. Understanding these restrictions before purchasing is crucial.
My Personal Advice for San Diego First-Time Buyers in 2025
After helping dozens of first-time buyers navigate the San Diego market over the years, here’s what I’m telling my clients in 2025:
- Don’t wait for the “perfect” market conditions. San Diego’s desirability means that even in market corrections, prices tend to stabilize rather than drop dramatically. Getting in the market is often more important than timing it perfectly.
- Be open to emerging neighborhoods. Some of my most successful clients have purchased in areas just beginning to gentrify, like parts of Southeast San Diego or Lemon Grove, and have seen significant appreciation as these areas improve.
- Layer multiple assistance programs when possible. Combining state, local, and federal programs can dramatically reduce your upfront costs. Work with lenders who specialize in these combinations.
- Consider “house hacking” to offset costs. Purchasing a property with an existing ADU or room to add one can significantly improve affordability through rental income.
- Don’t stretch beyond comfortable payment levels. San Diego’s economy can be volatile in certain sectors, and having payment reserves is crucial for peace of mind.
When my wife Elena and I bought our first home years ago, we stretched financially and experienced significant stress during the first year of homeownership. I’ve seen too many clients make the same mistake, especially in a high-cost market like San Diego. A comfortable payment that allows you to continue enjoying San Diego’s lifestyle is more important than buying the perfect property.
How to Get Started with San Diego Homebuyer Assistance
If you’re ready to explore these programs, here’s your action plan:
- Check your credit score and address any issues. Most programs require at least a 620 score, with better terms at 680+.
- Calculate your actual budget. Factor in not just the mortgage but also property taxes (approximately 1.25% of purchase price annually), HOA fees if applicable, and insurance (including earthquake insurance considerations).
- Complete a first-time homebuyer education course. Many assistance programs require this, and the San Diego Housing Commission offers free courses regularly.
- Connect with lenders who specialize in assistance programs. Not all lenders work with all programs, so finding one with specific experience is crucial.
- Get pre-approved before shopping. In San Diego’s competitive market, sellers won’t consider offers without solid pre-approval.
- Apply for assistance programs early. Many have waiting lists or limited funding cycles.
- Work with a real estate agent who understands these programs. The nuances of using assistance in competitive offer situations requires specialized knowledge.
I still remember driving down Harbor Drive with my first San Diego clients after they closed on their home near Liberty Station. The husband turned to me and said, “I never thought we’d be homeowners in San Diego. We assumed we’d have to move to Arizona or Nevada eventually.” Thanks to a combination of CalHFA assistance and a local program, they were able to stay in the city they loved.
The San Diego dream of homeownership is still achievable in 2025, even with our challenging market. The key is understanding exactly which programs you qualify for and how to strategically combine them for maximum benefit. Whether you’re looking at a condo in downtown’s East Village or a single-family home in Clairemont, there’s likely an assistance path that can help you get there.
From Mission Beach to San Marcos, from Point Loma to El Cajon, San Diego’s diverse communities offer something for every first-time buyer—if you know where to look and how to access the help that’s available. The perfect San Diego sunset looks even better when you’re watching it from your own backyard.
