FHA, VA or Conventional? 2026 Loan Limits and Options for San Diego County Home Buyers

by Eddie Lagunas

"Which loan should I use?" is the first question I hear from North County buyers, and it's a good one. With the 30-year rate at 7.32% (Freddie Mac, Oct. 22, 2026), the loan you pick matters more than it did a few years ago. As both a Broker Associate and a Loan Officer, I look at this from both sides. Here's a plain-English guide.

First, Know the 2026 Loan Limit for San Diego County

Loan limits cap how much you can borrow on a "conforming" loan, the kind Fannie Mae and Freddie Mac buy. For 2026, the national baseline is $832,750, and the ceiling in the highest-cost areas is $1,249,125 (FHFA, Nov. 25, 2025).

San Diego County is a high-cost area. According to FHFA's 2026 county limits file (FHFA 2026 county loan limits), the limits here are:

Property type	2026 conforming limit, San Diego County
1 unit (single-family, condo)	$1,104,000
2 units	$1,413,350
3 units	$1,708,400
4 units	$2,123,100

The FHA limit for a single-family home in San Diego County is also $1,104,000 for 2026. FHA limits apply to case numbers assigned on or after January 1, 2026, and are set by HUD between a national floor of $541,287 and the same $1,249,125 ceiling (HUD Mortgagee Letter 2025-23). Loans above the limit are "jumbo" loans, with their own underwriting rules.

For context, North San Diego County's median sales price was $1,020,000 in September 2026 (NSDCAR Marketwatch, Sept. 2026). So the median North County home can still fit under the conforming limit with a down payment. Higher-priced homes in Carlsbad or Rancho Santa Fe may not.

FHA Loans: Lower Barrier to Entry

FHA loans are insured by the government and built for buyers with smaller down payments or less-than-perfect credit.

Down payment and credit score. HUD guidelines allow maximum financing (a 3.5% down payment) with a credit score of 580 or higher. Scores of 500 to 579 are limited to 90% financing, meaning at least 10% down (HUD Handbook 4155.1).
Mortgage insurance. FHA charges an upfront premium of 1.75% of the base loan and an annual premium. For a 30-year loan with less than 5% down and a base loan at or under the national conforming limit, the annual premium is 0.55% and lasts for the life of the loan. With at least 10% down, it's 0.50% and can drop off after 11 years (HUD Mortgagee Letter 2023-05).

Example (my own math, for illustration only): On an $800,000 purchase with 3.5% down, the base loan is $772,000. The upfront premium is about $13,510, usually financed, for a total loan near $785,510. The annual premium works out to roughly $354 a month in the first year. At 7.32%, principal and interest would be about $5,396 a month. Your real numbers will differ with your credit, rate and taxes.

VA Loans: Often the Best Deal for Those Who Qualify

If you're a veteran, active-duty service member, or eligible surviving spouse, a VA loan is worth a serious look.

No down payment, and no loan limit with full entitlement. If your Certificate of Eligibility shows basic entitlement of $36,000, you have full entitlement and no VA loan limit, as long as you qualify and the appraisal supports the price (VA.gov).
No monthly mortgage insurance. Instead there's a one-time funding fee. For a first-time use, it's 2.15% with less than 5% down, 1.5% with 5% or more, and 1.25% with 10% or more. Veterans receiving VA compensation for a service-connected disability are generally exempt (VA funding fee).
Seller credits are allowed, up to 4% of the home's reasonable value for concessions. You can finance the funding fee but not other closing costs, according to the VA.

Conventional Loans: Flexibility and Cheaper Insurance for Strong Credit

A conventional loan isn't government-backed. It usually rewards good credit and a bigger down payment.

Down payment. You don't need 20%. Many conventional programs go lower, though the exact minimum depends on the program and lender.
Mortgage insurance can be canceled. Private mortgage insurance is typically required with less than 20% down (CFPB). Unlike lifetime FHA premiums, you can generally ask to cancel PMI when your balance reaches 80% of the home's original value, and it must end automatically at 78% if you're current on payments (CFPB).
Jumbo rules apply above $1,104,000. Expect a larger down payment, higher reserves, and stricter credit standards.

How to Choose

If you...	Start by comparing...
Have a lower credit score and a small down payment	FHA vs. a CalHFA program
Are a qualified veteran	VA, then compare with conventional
Have strong credit and 5% to 20% down	Conventional
Are buying above $1,104,000	Jumbo, or a larger down payment to stay conforming

The cheapest loan on paper isn't always the best one. With rates this high, ask me to compare the total monthly payment, cash to close, and cost over the five to seven years you expect to stay.

Frequently Asked Questions

What is the loan limit in San Diego County for 2026? $1,104,000 for a one-unit property, for both conforming and FHA loans.

How much do I need to put down on an FHA loan? As little as 3.5% with a credit score of 580 or higher, per HUD guidelines.

Do VA loans have a limit? Not for borrowers with full entitlement. Your lender still has to approve the loan amount.

Can I use down payment assistance with these loans? Often yes. California and San Diego County programs are designed to pair with FHA and conventional first mortgages. I'll cover those in my next post.

What if my price is above the limit? You can put more down to bring the loan under $1,104,000, or look at a jumbo loan.

Let's Find the Right Loan for You

I'll compare FHA, VA, conventional and jumbo options side by side for your budget, at no cost. Call or text me at 760-521-4880 to get started.

Rates, limits and program rules change. This article is general information, not a loan commitment or tax advice.

Eddie Lagunas, Broker Associate, eXp Realty | DRE #01273510 | 760-521-4880
Edgar "Eddie" Lagunas, Loan Officer, West Coast Financial | NMLS #257063