FHA loans have maximum loan limits based on county. Many counties in California have a limit of $1,149,825. However, there are some counties where that limit is higher because the value of property is higher. San Diego County has a loan limit of $1,006,250.
Financial advisors often recommend a 20% down payment. Therefore, to purchase a home worth a million dollars, you'd generally need a hefty $200,000 for the down payment.
You may be denied for an FHA loan if you have declared bankruptcy but you have not had the bankruptcy discharged. You may be denied if you are delinquent on federal taxes or otherwise owe money to the federal government but without an approved payment plan.
There are no minimum or maximum income requirements for FHA home loans.
Homes that may not pass an FHA inspection
Health and safety concerns: Properties with potential health and safety hazards, such as lead-based paint, asbestos, or mold, may not qualify for an FHA loan.
To comfortably afford a home valued at $1 million, financial experts recommend an annual salary between $269,000 and $366,000. This range, however, is subject to variation depending on your: Annual income. Debt-to-income ratio (DTI)
Closing costs on a $1 million house
On average, you can expect closing costs to total between 2% to 5% of the purchase price of the home, depending on your lender.
Here's what a monthly mortgage payment would look like on a $1 million home assuming the same caveats as above: 15-year mortgage at 5.53%: $6,549.41 per month. 30-year mortgage at 6.16%: $4,879.01 per month.
The FHA approves loan amounts based on factors like your credit score, living expenses, assets, debt-to-income ratio, household income, and the value of the property. As of 2025, the FHA maximum loan limit for a one-unit property is $524,225 in low-cost areas and $1,209,750 in high-cost areas.
To qualify for a mortgage on a $1 million home, you'll need roughly $224,223 in cash for the down payment and closing costs, a credit score of at least 700, and enough savings to cover 6–12 months of mortgage payments.
Credit score requirements
Most first-time home buyer programs require a minimum credit score, often around 620, to qualify for conventional loans. However, some programs, like FHA loans, are more lenient, allowing scores as low as 580 or even lower with higher down payments.
Government Assistance
For example, California has the CalHFA program available to qualified low-income buyers. The program provides grants and loans to eligible borrowers, and the money can either directly subsidize part of a down payment, or cover the entire thing, depending on certain factors.
Challenges Agents Face When Selling a Million Dollar House
Only a few people can afford to pay such a high amount for a property. So, the target clients are usually wealthy people. Since the client pool is small, finding prospective buyers becomes arduous for real estate agents.
People often think about their home buying budget in terms of down payment. For a $1 million home, you're likely to need a minimum of $200,000 to $300,000 saved for that purpose. But a down payment isn't the only thing to save for. Home buyers have to consider closing costs on their home purchase, too.
According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance. Private mortgage insurance.
On a $70,000 salary using a 50% DTI, you could potentially afford a house worth between $200,000 to $250,000, depending on your specific financial situation.
The largest concern sellers have with FHA loans is the appraisal/inspection process. FHA loans have the reputation of having strict requirements for appraisals and inspections. The FHA has what they call 'Minimum Property Requirements,' if a property doesn't meet even one of them, financing falls through.
Must have an undamaged exterior, foundation and roof. Must have safe and reasonable property access. Must not contain loose wiring and exposed electrical systems. Must have all relevant utilities, including gas, electricity, water and sewage functioning properly.