Yes, submitting a naturalization application before reaching exactly 5 years of residence in France carries a risk of rejection, because the 5-year residency requirement is a strict legal condition for standard naturalization by decree (naturalisation par décret). However, some exceptions exist, such as for holders of a French master's degree, which can reduce the required residency period to 2 years. Your case is borderline: you submitted in July 2025, a few weeks before your 5-year anniversary in August 2025, so the outcome depends on how the prefecture interprets the timing and whether your master's degree qualifies you for the reduced residency exception.
Here is the practical breakdown. For standard naturalization, you must prove you have been habitually resident in France for the last 5 years. The application is typically examined based on the situation at the time of submission. If you file before the 5-year mark, the prefecture may consider your residency incomplete and reject the application as premature. However, if you obtained a French master's degree (master) after at least 2 years of study in France, you may qualify for the reduced residency requirement of 2 years. In that case, your 5-year timeline becomes irrelevant, and the application could be accepted even if filed earlier. Your situation is nuanced: you arrived in August 2020, obtained a French master's after 1 year of study (so likely in 2021), and then had 6 months of APS (autorisation provisoire de séjour) before starting a CDI in March 2022. The key question is whether your master's degree was obtained after at least 2 consecutive years of study in France. Since your master's program was only 1 year, you might not meet the 2-year study condition for the reduced residency exception. The prefecture will scrutinize this.
Tradeoffs to consider. If you are rejected, you can reapply after reaching exactly 5 years, but the rejection may be noted in your file. There is no automatic penalty, but it could slow down a future application. Some applicants choose to wait until the 5-year mark to avoid any ambiguity. Your strong integration factors (stable CDI, high salary, marriage, property purchase) work in your favor, but they do not override the residency requirement.
Concrete next steps. First, check your ANEF application status: if it is still being processed, you could withdraw it and resubmit after August 2025 to play it safe. Second, gather proof of your master's degree duration (transcripts showing the program length) to argue for the 2-year exception if applicable. Third, consult a French immigration attorney (avocat en droit des étrangers) for a personalized opinion, especially if the prefecture requests additional documents. Finally, if you proceed, prepare a cover letter explaining why you believe you meet the conditions, citing the master's exception if relevant.
Remember, each prefecture has some discretion, so outcomes vary. The safest path is to wait until you have exactly 5 years of residence, but your strong profile may still succeed if you can convincingly argue the reduced residency exception. Good luck.