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Are You Ready to Buy in SF? Credit, Cash and a Readiness Check

Updated 2026-10-24, 6 minute read

You are ready to buy in San Francisco when you pass five tests: two years of stable, documentable income; cash for the down payment, about 2% in closing costs and six months of reserves after closing; a debt-to-income ratio that leaves room to live here; a middle credit score of 740 or better, or a plan to get there; and a horizon of five years or more. Fail one and the answer is "not yet", which is a plan, not a verdict.

The five readiness tests

Test	Passing looks like	Why it matters in SF
Income stability	Same field for two-plus years, income you can document on W-2s or tax returns	Lenders average variable pay over 24 months; a job change mid-escrow can sink a loan
Cash	Down payment, closing costs and six months of total housing cost left over	Overbids and appraisal gaps get paid in cash, and the supplemental tax bill follows
Debt-to-income	Under 43% on lender math, under about 35% on yours	Dues and the 1.18% property tax are counted; your maintenance budget is not
Credit	Middle score 740-plus, no late payments in 24 months	Pricing tiers step at 740, 760 and 780; jumbo lenders want 700 to 740 just to qualify
Time horizon	Five to seven years minimum	Round-trip transaction costs above 8% need time to amortize

Cash you really need at your price point

Cash item	$1.1M condo, 20% down	$1.1M condo, 10% down	$1.9M house, 20% down
Down payment	$220,000	$110,000	$380,000
Closing costs (about 2%)	$22,000	$22,000	$38,000
Reserves after closing	6 months, about $49,500	6 months, about $54,000	6 to 12 months, $85,000 to $170,000
Total	about $290,000	about $185,000	$500,000 to $590,000

Under 20% down you pay private mortgage insurance, typically 0.46% to 1.5% of the loan per year depending on your score, or $380 to $1,240 a month on a $990,000 loan. Down payment and PMI covers when it is worth it.
The house loan is above the 2026 conforming limit of $1,249,125 for San Francisco County, so it is a jumbo, and jumbo lenders commonly ask for six to twelve months of reserves.
Nationally, the median first-time buyer put about 10% down in 2025 and roughly a fifth to a quarter used gifts or loans from family. Lenders accept documented gifts; ask early about the paperwork.
San Francisco's Downpayment Assistance Loan Program lent up to $500,000 in its 2025 cycle to households under its income limits who had not owned in three years. Check MOHCD for the 2026 cycle; assistance programs explains DALP, BMR units and CalHFA.

Credit: the score lenders use, the tiers, and a fix plan

Lenders pull all three bureaus and use the middle score for each borrower (the lower of two if only two report). With two borrowers, Fannie Mae's automated system uses the average of your median scores for eligibility and pricing, but many jumbo programs still key off the lowest borrower's score, so ask how a 660 and a 790 would be priced together. Since September 2026 Fannie Mae and Freddie Mac accept VantageScore 4.0 from any approved lender alongside classic FICO, but the three-bureau pull has not changed.

Minimums: 620 conventional, 580 FHA with 3.5% down. Fannie Mae's loan-level price adjustment matrix sets the tiers: best pricing from 780, steps at 760, 740, 720 and 700, a noticeable penalty below 680 and a steeper one below 640. Jumbo lenders set their own grids, usually starting at 700 or 740.

A three- to six-month fix plan:

Pull all three reports free, as often as weekly, at annualcreditreport.com. Dispute every error in writing; the bureau has 30 days to investigate.
Pay revolving balances down before the statement date so low balances get reported; this is the fastest lever.
Do not open or close accounts or finance a car until you have keys.
Ask a creditor for a goodwill removal of a single late payment if your history is otherwise clean.
Shop lenders inside a 14-day window: newer FICO versions treat mortgage inquiries within 45 days as one, older versions and VantageScore use 14 days, and you cannot control which version a lender pulls.

Debt-to-income: what lenders allow versus what leaves you room to live

Fannie Mae's automated underwriting allows a debt-to-income ratio up to 50%; manual underwriting caps at 36%, or 45% with strong credit and reserves. The old 43% qualified-mortgage line was replaced in 2021 by a price-based test, so 43% is no longer a hard legal limit, though many jumbo lenders still use it.

Lenders count principal, interest, property tax, insurance and HOA dues plus your car, student loan and credit card minimums. They do not count maintenance, utilities or childcare.

Lender-counted housing payment	At 43% DTI, no other debt	At 50% DTI, no other debt
$1.1M condo: about $7,800	$217,000 gross income	$187,000 gross income
$1.9M house: about $12,600	$351,000 gross income	$302,000 gross income

Every $500 of monthly debt payment adds roughly $14,000 to the income you need at 43%. Our view: keep total housing cost including maintenance under about 35% of gross income so you can keep saving and absorb surprises. Lenders will approve more; you do not have to take it.

Student loans: Fannie Mae uses the documented payment, or 1% of the balance (or a fully amortizing payment) if the loan is deferred or reports $0; Freddie Mac uses 0.5%.

Income in SF: RSUs, bonuses, equity, self-employment

SF paychecks are lumpy, and lenders have rules for each lump.

Salary: two years in the same line of work, documented with W-2s and pay stubs. A recent job change in the same field at a salary is usually fine; a move to commission or contract work resets the clock.
Bonus and commission: Fannie Mae recommends a two-year history and allows twelve months with offsetting factors. The lender averages it, so a bonus that fell last year gets averaged down.
RSUs: shares vested and distributed over the past 24 months, averaged, with the share price set at a trailing average (methods vary by lender), plus evidence the grants continue. Unvested grants and private-company equity are assets at best, not income.
Self-employment: expect two years of personal and business tax returns; write-offs lower qualifying income.

If much of your pay is variable, have a lender run the numbers before you pick a price point; pre-approval explains what to bring.

Life questions

Hold period: if there is a real chance you leave the Bay Area within five years, the rent-vs-buy math says rent.
Partners and co-buyers: put title, ownership shares and an exit plan in writing before you shop; see TIC attorneys and fractional lenders.
Kids and commute: be concrete about where you need to be at 8 a.m. and what transit, parking and daycare cost from each candidate area.
Earthquakes: the USGS puts the odds of a magnitude 6.7 or larger quake in the Bay Area before 2043 at 72%. Factor in retrofit condition and earthquake insurance.

Signs you should wait a year, and what to do with that year

Wait if any of these is true: your reserves after closing would be under three months; your middle score is below 700 and you need a jumbo; your income has been at its current level for under a year; you are counting on a bonus or a stock vest to make the down payment; you are not sure you will be here in five years.

Use the year well: fix report errors, pay revolving debt to near zero, automate savings, keep your job and tax returns clean, and track real sales in your target areas with the comps tool so you know prices, not list prices, when you are ready.

Your readiness score and your first three moves

One point per test passed. Five, you are ready; four, fix the gap and start in parallel; three or fewer, wait and work the list above.

If you are ready, your first three moves: quotes from at least three lenders inside a 14-day window, interviews with two or three agents without signing anything, and a target price set by the true monthly cost rather than the lender's maximum. If you later work with one of this site's agents, the buyer-side commission is how the site is paid; the checklist is the same either way.

Frequently asked questions

How much money do I need saved to buy a home in San Francisco?

For a $1.1M condo with 20% down, plan on about $290,000: $220,000 down, roughly $22,000 in closing costs and six months of total housing cost in reserve. With 10% down the cash need falls to about $185,000 but you add PMI. For a $1.9M house with 20% down and a jumbo loan, lenders often want six to twelve months of reserves, so the total is $500,000 to $590,000. Nationally the median first-time buyer put about 10% down in 2025, and roughly a fifth to a quarter used gifts or loans from family or friends.

What credit score do I need to buy a house in California?

The floor for a conventional loan is a 620 representative score, and FHA allows 580 with 3.5% down. Jumbo lenders, which most SF house buyers need, usually want 700 to 740. Pricing is tiered: Fannie Mae's best pricing starts at 780, with steps at 760, 740, 720 and 700, a noticeable penalty below 680 and a steeper one below 640. Lenders use the middle of your three bureau scores.

Can I count RSUs or bonuses toward my mortgage qualification?

Yes, with history. Fannie Mae counts RSU income from shares that have vested and been distributed over the most recent 24 months, averaged, with the share price set at a trailing average rather than today's price (methods differ by lender, so ask), and it expects the awards to continue. Bonus and commission income is strongest with a two-year history; twelve months can work with offsetting factors. Unvested grants and private startup equity do not count as income.

Should I pay off student loans or save for a down payment first?

Usually save, unless the loan payment is what breaks your debt-to-income ratio. Lenders count your documented student loan payment, or about 1% of the balance under Fannie Mae rules (0.5% under Freddie Mac) if the loan is deferred or shows no payment. If that payment keeps you under the lender's DTI limit, the down payment is the harder constraint in SF and the cash is worth more there.

How fast can I raise my credit score before applying for a mortgage?

Errors can be fixed in 30 to 60 days: bureaus must investigate a dispute within 30 days, and the correction shows on the next reporting cycle. Paying revolving balances down before statements close can move a score within one or two cycles. Late payments and collections fade slowly, so give yourself three to six months, pull your free reports weekly at annualcreditreport.com, and do not open or close accounts during that window.

Can I buy in SF on a single income?

Yes, but the math is unforgiving. The lender-counted payment on a $1.1M condo (principal, interest, tax, insurance and dues) is about $7,800 a month, which needs roughly $187,000 to $217,000 of gross income with no other debt at a 50% or 43% debt-to-income ratio. Below that, look at smaller condos, a co-buyer, MOHCD's below-market-rate and downpayment assistance programs, or a longer saving runway.