California FHA LOAN FHA loan is one of the most common loan programs for a first time home buyers in California. This program requires a 3% down payment  (which also can be a gift) and it is more forgiving of past credit issues. I will look at your past 2 years of your credit history, not the score, but your credit history. If there are items that are questionable we will have to write up an explanation letter and support this with a documentation. Such example is medical bills. FHA and Your Credit: FHA requires at least 4 open trade lines. If you have not developed your credit the alternatives can be used: Rental Payment, Utility Payment or any other payments.   FHA requires any outstanding collection accounts, judgments, charge off's be paid in full before closing. Therefore, I can work with you if you need an assistance of paying off these debts.   The following are credit guidelines set  by FHA Previous rental or mortgage payment histors Your payment history is reviewed for the previous 12 months. Recent and/or undisclosed debts A satisfactory explanation of new credit or inquiries will be required. Collections are not required to be paid prior to loan approval if mitigating factors are present Judgements will be required to be paid before your loan closes. Chapter 7 Bankruptcy will not disqualify you if 24 months from the Discharge Date has passed and you have reestablished credit. FHA will consider a loan after 12 months if you can document the bankruptcy was caused by events beyond your control. Chapter 13 Bankruptcy is allowed after 12 months of the pay out period has elapsed with court approval. Previous mortgage foreclosure will be allowed after three years. In rare cases, an exception may be granted with very well documented extenuating circumstances after 2 years.   FHA Loan has MIP (Mortgage Insurance Premium) FHA is a government-administered mortgage insurance program and in order for you to be bale to get it you will have to meet some strict criteria.  When you choose FHA insurance you will have to pay the insurance for the entire length of the loan unlike private mortgage insurance this type cannot be canceled at any time no matter how much equity you have built up in your home. FHA is not such a good idea if you have good credit, it is more for those with bad credit and who need some help getting the mortgage that they need to buy their new home.