Straight Answers
Four Questions First-Time Buyers Ask Me Most
Real numbers, the fine print, and what to do next. Figures are dated and sourced below each answer. I'm a real estate agent, not a lender, so a licensed loan officer has to confirm what you qualify for.
How much cash do I need to buy my first home?
Short answer: With an FHA loan, plan on roughly 5% to 7% of the purchase price in cash: 3.5% down, plus closing costs and prepaid items, minus any seller credit. Down payment assistance can bring that number down a lot.
What changes the number:
- Down payment. FHA allows 3.5% down with a credit score of 580 or higher. Conventional loans can go as low as 3% for some first-time buyers.
- Closing costs and prepaid items. Lender, title and escrow fees, plus your first year of homeowners insurance and a few months of property taxes and interest paid up front. These often add up to about 2% to 4% of the price.
- Seller credits. FHA lets the seller pay up to 6% of the price toward your closing costs. Whether a seller agrees depends on the market and the home.
- Reserves. Money left in the bank after closing. FHA usually doesn't require it for a single-family home, but some lenders do, and it's smart to have a cushion anyway.
- Earnest money (your good-faith deposit) isn't an extra cost. It counts toward your down payment and closing costs.
Example: a $510,000 home with an FHA loan
Close to Palmdale's recent median price. All figures are estimates for illustration.
| Down payment (3.5%) | $17,850 |
|---|
| Closing costs and prepaid items (about 3%) | + $15,000 |
|---|
| Seller credit negotiated in the offer | − $7,500 |
|---|
| Cash needed at closing | $25,350 |
|---|
| Reserves: 2 months of payments, kept in the bank | $8,650 |
|---|
| Total cash to have ready | about $34,000 |
|---|
Assumes a 7.25% interest rate (Freddie Mac's 30-year average was 7.24% on October 29, 2026). The 1.75% upfront FHA mortgage insurance is added to the loan, not paid in cash. Estimated monthly payment of about $4,320 includes principal and interest ($3,416), FHA mortgage insurance ($226), property taxes at about 1.25% ($531), and homeowners insurance ($150). Your rate, taxes and insurance will differ.
Next step: Take the 2-minute readiness quiz, then book a call and I'll connect you with a lender for a written estimate on the price range you want.
Sources: Freddie Mac PMMS (rate, Oct. 29, 2026); HUD Single Family Housing Policy Handbook 4000.1 (FHA down payment, mortgage insurance and seller-credit rules); Palmdale market snapshot (Redfin, three months ending Sept. 2026).
Can I buy a condo with FHA financing?
Short answer: Often, yes, but it takes two separate approvals. You have to qualify for the loan, and the condo itself has to be eligible for FHA. A buyer can be fully approved and still not be able to use FHA on a particular condo.
Check 1: you. The lender reviews your credit, income, debts and savings, the same as for a house.
Check 2: the property and its complex. One of these has to be true:
- The complex is FHA-approved. You can look it up on HUD's approved-condo list. Approvals expire, so check the date.
- The unit qualifies for a Single-Unit Approval. FHA can approve one unit in a complex that isn't on the list. The complex has to be finished, and most need at least 50% of units lived in by their owners. FHA also caps how many of its loans can be in one complex: 10% of units in complexes with 10 or more units, or 2 units in smaller ones.
The lender will also look at the HOA: its budget and reserves, delinquent dues, insurance and any pending lawsuits. Any of these can stop an FHA loan even when the unit looks perfect.
Example
A buyer is preapproved for FHA and finds a Chatsworth townhome in a 60-unit complex that isn't on HUD's list. A Single-Unit Approval may still work, but only if fewer than 6 units already carry FHA loans and the owner-occupancy and HOA documents check out. If not, the choices are a conventional loan or a different complex.
Next step: Before you write an offer on a condo, send me the address. I'll check HUD's list and request the HOA documents so your lender can confirm eligibility early, not during escrow.
Sources: HUD condominium rule announcement (effective Oct. 15, 2019); HUD Handbook 4000.1.
Can ADU rental income help me qualify?
Short answer: Sometimes, and only part of the rent counts. FHA, Fannie Mae and Freddie Mac can count rent from an ADU on a single-family home you'll live in. They generally count 75% of the rent, cap it at 30% of your total qualifying income, and require the ADU to be legal.
What a lender has to review:
- Is the ADU legal? It must be allowed under zoning, and the appraiser must say it can be legally rented. Unpermitted units usually don't count. I check permit history before anyone relies on the rent.
- What rent does the appraiser support? The appraiser completes a rent schedule using comparable rentals, including at least one ADU. FHA uses 75% of whichever is lower: that market rent or the lease.
- The 30% cap. ADU rent can't make up more than 30% of the income you qualify with.
- Loan type and transaction. Rules differ. FHA doesn't allow ADU rent for a cash-out refinance, Freddie Mac allows it on purchases, and Fannie Mae on purchases and limited cash-out refinances. Conventional loans may also look at landlord experience or require a landlord education course.
- Reserves. FHA requires two months of payments in the bank after closing when ADU rent is used.
- An ADU you plan to build doesn't count today. The exception is an FHA 203(k) renovation loan, which counts 50% of the expected rent.
Example
A buyer earns $8,000 a month. The home has a permitted ADU, and the appraiser supports $2,200 a month in rent. On an FHA loan, the lender counts 75%, or $1,650. Total qualifying income becomes $9,650, and $1,650 is about 17% of that, under the 30% cap. The lender counts $1,650, not the full $2,200.
Next step: Run the free ADU feasibility check or read my ADU guide, then ask your loan officer to confirm how their program treats ADU rent.
Sources: HUD Mortgagee Letter 2023-17 (Oct. 16, 2023); Fannie Mae Selling Guide B3-3.8-02 (Sept. 2, 2026); Freddie Mac ADU fact sheet (Mar. 2024).
What changes when buying in Chatsworth versus Palmdale?
Short answer: Price is the biggest difference. Chatsworth's median sale price is about $384,000 higher, so the down payment and monthly payment are much larger. Down payment help, utilities, transit, and possible extra property taxes also differ.
*Redfin, three months ending September 2026.
Practical points: get homeowners insurance quotes early for both. Parts of Chatsworth near the hills are in high fire-hazard zones. Test your actual commute at rush hour, since the 14 freeway from Palmdale and the 118 or 405 from Chatsworth can change a lot. Newer Palmdale homes can carry HOA dues and special taxes, so compare the total monthly cost, not just the price.
Next step: Compare the Chatsworth and Palmdale guides, then book a call and I'll pull current MLS numbers for the home type you want in each.
Sources: Redfin via my Chatsworth and Palmdale pages (three months ending Sept. 2026); HUD FHA mortgage limits (2026); LA Housing Department, LIPA; LACDA Home Ownership Program; SCE and EPIC rate comparison. Checked November 3, 2026.
