First-Time Home Buyer Guide for Monterey County & the Monterey Peninsula

What Is Considered a First-Time Home Buyer?

Being a "first-time home buyer" does not always mean you have never owned real estate.

Definitions vary by loan and assistance program.

For example, California Housing Finance Agency programs generally define a first-time home buyer as someone who has not owned and occupied their own home during the previous three years and has not lived during that period in a home owned by a spouse, subject to program rules and exceptions.

This means someone who owned a home several years ago may still qualify as a first-time buyer under some programs.

Always use the definition for the particular mortgage or assistance program you are considering.

Step 1: Understand What You Can Comfortably Afford

Before looking seriously at homes, decide how much housing cost fits your financial life.

This is different from asking how much a lender will approve.

Your total ownership budget can include:

• Mortgage principal and interest
• Property taxes
• Homeowner insurance
• Mortgage insurance if applicable
• HOA dues
• Utilities
• Maintenance
• Repairs
• Future improvements

A lender may approve a payment that is technically possible under lending guidelines but higher than you personally want to spend.

Start with our Preparing Financially to Buy a Home guide.

Step 2: Understand the Cash You Will Need

A first-time buyer does not simply need a down payment.

Depending on the transaction, you may also need money for:

• Closing costs
• Inspections
• Appraisal
• Homeowner insurance
• Prepaid interest
• Initial property-tax and insurance reserves
• Moving
• Immediate repairs or improvements

You should also consider how much cash you want to retain after closing.

For a detailed explanation, see our Buyer Closing Costs & Cash to Close Guide.

You May Not Need a 20% Down Payment

Many first-time buyers assume they must save 20% of the purchase price before buying a home.

That is not necessarily the case.

Mortgage programs exist with lower down-payment requirements for qualified borrowers.

The appropriate loan depends on factors such as:

• Credit
• Income
• Debt
• Available savings
• Property type
• Purchase price
• Occupancy
• Mortgage-insurance costs

A smaller down payment may make ownership possible sooner, but it can also affect monthly payments, mortgage insurance and reserves.

Compare the complete financial structure rather than choosing a down payment solely because it is the minimum allowed.

Step 3: Review Your Credit Early

Your credit profile can affect both mortgage qualification and loan pricing.

Before beginning a serious search:

• Review your credit reports
• Look for errors
• Understand outstanding debts
• Avoid unnecessary new credit
• Discuss concerns with a mortgage professional

Do not wait until you have found the perfect home to discover that a credit or documentation issue needs several weeks to resolve.

Step 4: Get Mortgage Preapproval

A meaningful mortgage preapproval is one of the most useful steps a first-time buyer can take.

The lender may review:

• Income
• Employment
• Assets
• Credit
• Debts
• Down payment
• Reserves

A preapproval helps establish a practical purchasing range and can make your eventual offer more credible to a seller.

It is not a final loan guarantee. Final approval still depends on underwriting, the property, appraisal, insurance and other conditions.

Read our Mortgage Preapproval Guide before you begin seriously touring homes.

Compare Mortgage Lenders

You do not necessarily need to use the first lender you speak with.

Compare:

• Interest rate
• APR
• Points
• Lender fees
• Mortgage insurance
• Loan program
• Estimated payment
• Cash needed to close
• Responsiveness
• Ability to meet the transaction timeline

For more information about loan structures, see our Home Financing & Mortgage Guide.

First-Time Buyer & Down Payment Assistance Programs

California and local programs may help some qualified buyers with down payments or closing costs.

These programs can be valuable, but their funding, income limits, purchase-price limits and eligibility requirements can change.

Never assume a program you read about online is currently accepting applicants.

CalHFA Home Buyer Programs

The California Housing Finance Agency, commonly known as CalHFA, offers mortgage and assistance programs for qualified California home buyers.

Programs can include:

• Conventional first mortgages
• FHA financing
• VA financing
• USDA financing where eligible
• Down-payment assistance
• Closing-cost assistance

Eligibility varies according to the individual program.

Requirements can involve:

• Income limits
• Credit
• Owner occupancy
• Homebuyer education
• Property eligibility
• Loan qualification

View Current CalHFA Home Buyer Programs →

CalHFA MyHome Assistance

At the time this guide was updated in September 2026, CalHFA's MyHome Assistance Program offered qualified borrowers a deferred-payment junior loan that could provide an amount up to the lesser of 3% of the purchase price or appraised value toward down payment and/or closing costs.

Program guidelines, income limits and availability can change, so buyers should verify current terms with a CalHFA-approved lender rather than relying on an older online description.

California Dream For All

The California Dream For All Shared Appreciation Loan Program is a separate CalHFA program designed for qualified first-generation home buyers.

The program can provide significant down-payment and closing-cost assistance, but it is different from a conventional grant.

It is a shared appreciation program. When specified repayment events occur, the buyer generally repays the original assistance plus an agreed share of the home's appreciation.

Funding is limited and application rounds have used a registration and randomized-selection process.

The 2026 program round has already gone through its application and voucher-selection process, so future buyers should check CalHFA directly for the next funding opportunity rather than assuming applications are continuously open.

Check Current Dream For All Program Status →

First-Time vs. First-Generation Home Buyer

These terms are not interchangeable.

A first-time buyer may qualify under a program based on recent homeownership history.

A first-generation buyer must satisfy additional family-homeownership criteria established by the applicable program.

Dream For All currently uses first-generation eligibility requirements in addition to first-time-buyer requirements.

Homebuyer Education May Be Required

Some assistance programs require formal homebuyer education and counseling.

CalHFA requires qualifying first-time buyers using its programs to complete approved education.

Approved options can include designated online education or qualifying live counseling through organizations such as HUD-approved housing counseling agencies.

Even when education is not required, a reputable homebuyer counseling program can be useful for someone purchasing for the first time.

Find a HUD-Approved Housing Counselor →

Monterey County First-Time Home Buyer Assistance

Monterey County has operated a First-Time Homebuyers Down Payment Assistance Program for qualifying buyers purchasing in eligible unincorporated areas.

As of September 2026, that program is temporarily suspended while new program guidelines are being developed.

Because this could change, buyers interested in assistance should check directly with Monterey County Housing and Community Development rather than ruling the program out permanently.

Check Monterey County Home Buyer Program Status →

City of Marina Below-Market-Rate Homeownership

Marina provides another type of homeownership opportunity through its Below Market Rate Homeownership Program.

This is not simply a traditional down-payment assistance program. Eligible homes are sold subject to income, occupancy, resale and other program requirements designed to preserve long-term affordability.

The City currently maintains an interest-list process for qualified buyers as available BMR homes are offered.

These properties can have restrictions affecting:

• Income eligibility
• Household size
• Assets
• Owner occupancy
• Resale
• Rental
• Future appreciation

Buyers should fully understand the deed restrictions and long-term economics before deciding whether a BMR home fits their goals.

Explore Marina's BMR Homeownership Program →

Other Local Affordable Homeownership Opportunities

Affordable ownership opportunities can occasionally become available through local inclusionary or purchase/resale programs.

Availability is often limited and may involve:

• Income limits
• Owner-occupancy requirements
• Resale restrictions
• Maximum assets
• Preference criteria

If assistance or deed-restricted ownership is important to your purchasing strategy, investigate these opportunities early rather than waiting until you are ready to make an offer.

Assistance Programs Are Not Always the Best Choice

A program offering assistance can be valuable, but buyers should understand the complete terms.

Ask:

• Is the assistance a grant or a loan?
• Is repayment deferred?
• Does interest accrue?
• Is appreciation shared?
• Are there resale restrictions?
• Are there owner-occupancy requirements?
• Can the loan be refinanced easily?
• What happens when I sell?
• Are there income or purchase-price limits?

The amount of assistance is only one part of the financial decision.

Step 5: Understand Buyer Representation in California

First-time buyers should understand who represents them before touring and negotiating for property.

California buyers working with a buyer's agent should expect a written buyer-broker representation agreement early in the relationship.

The agreement addresses matters such as:

• Services
• Compensation
• Length of representation
• Scope of representation
• Termination

Compensation is negotiable and should be understood before signing.

Read our Buyer Representation in California Guide.

Step 6: Decide Which Monterey County Communities Fit Your Budget

The Monterey Peninsula is not one uniform housing market.

First-time buyers should compare several communities rather than focusing only on one city name.

Marina

Marina real estate includes established neighborhoods as well as newer housing and condominium opportunities. Buyers interested in newer construction should also investigate the city's available BMR ownership programs when eligible.

Seaside

Seaside real estate includes cottages, mid-century homes, Monterey Bay-view properties, condominiums and newer communities such as Seaside Highlands and The Enclave.

Monterey

Monterey real estate provides a broad mix of condominiums, smaller homes, older residences and larger properties across numerous neighborhoods.

Pacific Grove

Pacific Grove real estate includes condominiums, cottages and older homes, although buyers should pay close attention to property condition, permits and historic considerations.

Carmel & Pebble Beach

Carmel and Pebble Beach often involve higher property values, but first-time buyers should not automatically exclude a community solely because of its reputation. Condominiums, smaller homes and changing inventory can create opportunities at different price levels.

Do Not Choose a Community Based Only on Purchase Price

Consider total ownership cost and lifestyle.

A condominium with a lower purchase price may have substantial HOA dues.

An older detached home may have no HOA but require more repairs.

A longer commute might allow a larger home but create additional transportation costs and time commitments.

Compare the complete picture.

Step 7: Begin the Property Search

Once financing and representation are established, begin comparing real properties rather than simply browsing photographs.

Use our Monterey Peninsula MLS property search to see current available homes.

When evaluating properties, consider:

• Neighborhood
• Condition
• Lot
• Parking
• Natural light
• Noise
• Insurance
• HOA dues
• Future repairs
• Property taxes
• Resale considerations

Our Finding & Evaluating the Right Monterey Peninsula Property guide explains these issues in detail.

Do Not Let Cosmetic Improvements Distract You

A first-time buyer can easily focus on finishes such as:

• Countertops
• Paint
• Flooring
• Cabinets
• Appliances

Those features matter, but expensive underlying systems can matter more.

Pay attention to:

• Roof
• Foundation
• Electrical
• Plumbing
• Sewer
• Drainage
• Heating
• Insurance

A dated kitchen can be remodeled later. A major foundation or drainage problem can be a much larger financial issue.

Condominiums Can Be a First-Time Buyer Option

Condominiums can provide an alternative to detached homes, particularly for buyers who value lower exterior maintenance.

But evaluate both the unit and the homeowner association.

Review:

• HOA dues
• Reserve funding
• Master insurance
• Special assessments
• Litigation
• Rules
• Parking
• Rental restrictions
• Maintenance responsibilities

A lower purchase price can be offset by substantial monthly HOA obligations.

Condo Financing Can Be Different

A lender may need to approve not only you but also the condominium project.

HOA insurance, reserves, litigation and other project characteristics can affect mortgage eligibility.

If condominiums are part of your search, tell your lender early.

Older Monterey Peninsula Homes Need Careful Evaluation

Many homes in Monterey, Pacific Grove, Carmel and surrounding communities are decades old.

Age itself is not necessarily a negative—older homes can offer excellent locations and architectural character.

But a first-time buyer should understand potential costs involving:

• Electrical systems
• Plumbing
• Sewer laterals
• Foundations
• Roofs
• Chimneys
• Drainage
• Windows
• Unpermitted improvements

Step 8: Analyze Value Before Making an Offer

Do not base your offer solely on the asking price.

Your buyer's agent should help you evaluate:

• Recent comparable sales
• Current competing listings
• Market time
• Price reductions
• Condition
• Location
• Lot
• Views
• Seller circumstances when known

Research recent sales through our Monterey Peninsula recently sold property search.

Step 9: Understand the Offer Before Signing

Your offer is a proposed contract—not simply a price.

It can address:

• Purchase price
• Deposit
• Financing
• Appraisal
• Investigations
• Seller disclosures
• Title
• Closing date
• Credits
• Possession
• Buyer-broker compensation

A first-time buyer should never feel embarrassed about asking what a contract provision means.

Read our Making an Offer on a California Home Guide before you write your first offer.

Your Initial Deposit Is Not an Extra Cost

After acceptance, the buyer generally delivers an initial deposit to escrow according to the purchase agreement.

If the transaction closes, that deposit is credited toward the buyer's total purchase funds.

It is different from the total down payment and different from closing costs.

Step 10: Complete Your Due Diligence

After acceptance, review the property carefully.

Depending on the property, investigations can include:

• General home inspection
• Pest inspection
• Roof
• Sewer lateral
• Chimney
• Foundation
• Electrical
• Plumbing
• Drainage
• Permits
• Insurance
• HOA documents
• Title

Rural properties can also involve wells, septic systems, private roads and acreage-related issues.

Use our California Home Disclosures, Inspections & Buyer Due Diligence Guide as your starting point.

Seller Disclosures Do Not Replace Your Investigation

Seller disclosures tell you what has been reported or is known to the seller.

They do not guarantee that no additional problems exist.

Likewise, a seller-provided inspection report can be useful without necessarily eliminating the buyer's need for additional investigation.

Step 11: Investigate Homeowner Insurance Early

Do not assume every home will cost approximately the same amount to insure.

Insurance availability and cost can depend on:

• Location
• Wildfire exposure
• Age
• Roof
• Construction
• Replacement cost
• Claims history

This can be especially important in wooded, rural and higher-fire-risk locations.

Get a property-specific insurance quote before removing the applicable investigation protections.

Step 12: Prepare for the Appraisal

If you are financing the home, the lender may require an appraisal.

The appraisal helps the lender evaluate the property securing the mortgage.

It is not a substitute for a home inspection.

If the appraisal is lower than the purchase price, your options depend on the contract, financing and any remaining appraisal contingency.

Step 13: Understand California Property Taxes

Do not assume you will pay the same property taxes as the seller.

Under California Proposition 13, a qualifying change in ownership generally establishes a new assessed value based on current fair market value.

A long-time seller may be paying taxes based on an assessed value established decades ago.

Your future bill could therefore be substantially higher.

Read our California & Monterey County Property Tax Guide.

Expect a Supplemental Property-Tax Bill

After closing, Monterey County may issue a supplemental property-tax bill reflecting the change from the seller's prior assessed value to your new assessed value.

This bill is separate from ordinary escrow tax prorations.

It can arrive weeks or months after closing.

Even if your mortgage includes property-tax impounds, do not assume your lender will automatically receive and pay the supplemental bill.

Step 14: Understand Closing Costs

Your final cash requirement is not simply:

Purchase Price − Mortgage = Money Needed

The closing calculation can also involve:

• Deposit already paid
• Loan proceeds
• Closing costs
• Prepaid expenses
• Property-tax adjustments
• Seller credits
• Lender credits

Review our Buyer Closing Costs & Cash to Close Guide.

Step 15: Move Through Escrow

Escrow is the neutral process that coordinates money, documents and instructions required to complete the sale.

During escrow, several things happen simultaneously:

• Inspections
• Disclosures
• Mortgage underwriting
• Appraisal
• Insurance
• Title review
• HOA review if applicable
• Closing preparation

Read our Escrow, Title & Closing Guide for the complete process.

Wire Fraud: Verify Before Sending Money

Real estate transactions are common targets for wire fraud.

Before wiring your deposit or closing funds:

• Confirm instructions directly with escrow
• Use a trusted telephone number
• Do not rely solely on emailed instructions
• Be extremely suspicious of last-minute changes

A convincing-looking email does not prove that wiring instructions are legitimate.

Step 16: Complete the Final Walk-Through

Shortly before closing, buyers generally conduct a final verification of condition.

The purpose is generally to confirm that:

• The property remains in the expected condition
• Agreed repairs were completed if applicable
• No unexpected damage has occurred
• Included items remain
• Seller possession obligations are being followed

Step 17: Sign, Fund & Record

Near closing, the buyer signs applicable escrow, title and mortgage documents and delivers the remaining cash needed to close.

For a financed transaction, the lender then funds the mortgage when its conditions have been satisfied.

The required transfer documents are ultimately recorded with Monterey County.

Signing is not the same as closing, and lender funding is not necessarily the same as recording.

Escrow will confirm when the transaction has officially closed.

When Do You Get the Keys?

Possession is controlled by the purchase agreement.

It may occur:

• At closing
• At a specified time afterward
• After a negotiated seller occupancy period

Do not assume that signing documents automatically means you can move in immediately.

Your First Year of Homeownership

Financial preparation should continue after closing.

Plan for:

• Supplemental property taxes
• Routine maintenance
• Unexpected repairs
• Insurance renewals
• HOA increases or assessments if applicable
• Appliance replacement
• Future improvements

One of the best things a first-time buyer can do is retain an appropriate emergency reserve rather than spending every available dollar at closing.

Do Not Expect Your First Home to Be Your Forever Home

A common first-time-buyer mistake is trying to solve every future housing need with the first purchase.

Your first home may be:

• A condominium
• A smaller detached home
• A home needing cosmetic improvement
• A property in a different neighborhood than originally expected

The right first home is one that fits your current financial position, lifestyle and reasonable ownership horizon.

Think About Resale Before You Buy

You may not be thinking about selling while purchasing your first home, but future marketability still matters.

Consider features future buyers may also evaluate:

• Location
• Parking
• Floor plan
• Natural light
• Condition
• Noise
• HOA finances
• Insurance
• Lot usability

A property that appeals only to a very narrow group of buyers may be harder to resell later.

Common First-Time Buyer Mistakes

• Shopping seriously before becoming preapproved
• Using the lender's maximum approval as the personal budget
• Spending nearly all savings on the down payment
• Ignoring closing costs
• Assuming 20% down is always required
• Opening new debt before closing
• Choosing a home based mainly on cosmetic finishes
• Ignoring HOA finances
• Failing to investigate insurance early
• Assuming seller disclosures replace inspections
• Using the seller's current property-tax bill to estimate future taxes
• Forgetting about supplemental property taxes
• Removing contingencies without understanding the consequences
• Sending wire funds without independently verifying instructions

A First-Time Home Buyer Checklist

Use this sequence as a practical roadmap:

1. Establish a comfortable monthly housing budget.
2. Determine available down payment and reserves.
3. Review credit and debt.
4. Investigate first-time-buyer and assistance programs.
5. Obtain mortgage preapproval.
6. Establish buyer representation.
7. Compare Monterey County communities.
8. Begin the property search.
9. Evaluate property value and condition.
10. Write an informed offer.
11. Deliver the deposit.
12. Review seller disclosures.
13. Complete inspections and due diligence.
14. Investigate insurance.
15. Complete appraisal and final loan underwriting.
16. Review title and HOA documents if applicable.
17. Understand closing costs and cash to close.
18. Review the Closing Disclosure if financed.
19. Complete the final walk-through.
20. Verify wiring instructions and send closing funds securely.
21. Sign closing documents.
22. Confirm recording and possession.
23. Watch for supplemental property-tax bills after closing.

Where Should a First-Time Buyer Begin?

If you are months away from purchasing, begin with financial preparation and mortgage education.

If you are financially prepared and expect to purchase soon, get preapproved and establish buyer representation before seriously touring homes.

If you are already preapproved, the next step is identifying the communities and property types that fit your budget and lifestyle.

Working With the Monterey Peninsula Home Team

First-time buyers generally need more explanation during a transaction—not more pressure.

Our role is to help you understand what is happening, what decisions need to be made and where the risks may be before you become committed.

We help first-time buyers:

• Compare Monterey County communities
• Understand current inventory
• Evaluate properties
• Analyze comparable sales
• Develop offer strategies
• Review disclosures
• Coordinate inspections
• Track contractual deadlines
• Coordinate with lenders and escrow
• Navigate the purchase through closing

If you are considering your first home in Monterey, Seaside, Marina, Pacific Grove, Carmel, Carmel Valley or elsewhere in Monterey County, call Mark Bruno at (831) 917-8190.

First-Time Home Buyer FAQ

What qualifies someone as a first-time home buyer?

The definition depends on the program. For many CalHFA programs, a first-time buyer generally has not owned and occupied a home during the previous three years and has not lived during that period in a home owned by a spouse, subject to program-specific rules and exceptions.

Do first-time buyers need 20% down?

No. Qualified buyers may have access to mortgage programs requiring substantially less than 20% down. The appropriate option depends on credit, income, property type, loan program and the buyer's overall financial plan.

Are there down-payment assistance programs in California?

Yes. CalHFA and other programs may provide down-payment or closing-cost assistance to qualified buyers. Program availability, income limits and other requirements can change, so current eligibility should be verified before relying on a particular program.

What is CalHFA MyHome?

As of September 2026, CalHFA's MyHome Assistance Program can provide qualified borrowers with a deferred-payment junior loan of up to the lesser of 3% of the purchase price or appraised value toward down payment and/or closing costs, subject to current program requirements.

What is California Dream For All?

Dream For All is a CalHFA shared-appreciation assistance program for qualifying first-generation home buyers. The buyer repays the original assistance plus an agreed share of appreciation when specified repayment events occur. Funding is limited and availability is not continuous.

Does Monterey County have first-time-buyer assistance?

Monterey County has operated a First-Time Homebuyers Down Payment Assistance Program for qualifying purchases in unincorporated areas. As of September 2026, the program is temporarily suspended while new guidelines are developed, so buyers should check the County's current program status.

Does Marina offer affordable homeownership opportunities?

Yes. Marina currently operates a Below Market Rate Homeownership Program with income, asset, occupancy and resale requirements. Available properties and eligibility should be confirmed directly with the City.

Should I get preapproved before looking at homes?

You can research homes before preapproval, but financed buyers should generally become preapproved before beginning a serious search or preparing offers. Preapproval helps establish a realistic budget and demonstrates financial preparation to sellers.

Should I use the maximum amount my lender approves?

Not necessarily. A lender determines how much it may be willing to lend. Your personal budget should also consider taxes, insurance, HOA dues, maintenance, savings and other financial priorities.

Are condominiums good for first-time buyers?

They can be. Condominiums may offer lower exterior-maintenance responsibility and different price points, but buyers should carefully evaluate HOA dues, reserves, insurance, special assessments, rules and project financing eligibility.

Should a first-time buyer purchase an older home?

An older home can be an excellent purchase if the location, price and condition make sense. Buyers should carefully investigate major systems such as the foundation, roof, plumbing, electrical, sewer and drainage and understand any unpermitted improvements.

Do I need a home inspection if the seller already has an inspection report?

Seller-provided reports can be useful, but buyers should evaluate the scope, age and limitations of those reports and determine whether independent or specialist inspections are appropriate.

Will my property taxes be the same as the seller's?

Usually not if the seller has owned the property for a significant period. A qualifying change in ownership generally establishes a new assessed value, which can produce a substantially different property-tax bill.

What is a supplemental property-tax bill?

A supplemental tax bill adjusts California property taxes after a qualifying change in ownership or new construction. It is separate from normal escrow tax prorations and can arrive weeks or months after closing.

Can buying a car before closing affect my mortgage?

Yes. New debt can change your credit profile and debt-to-income calculations. Speak with your lender before taking on significant new financial obligations during the mortgage process.

What is the most important advice for a first-time home buyer?

Understand the complete financial commitment, become preapproved early, ask questions before signing contracts, investigate the property carefully and retain enough financial reserves that homeownership remains comfortable after closing.