for Every Homebuyer
Jumbo Loans
Dreaming big? We've got financing to match. If you need a loan that exceeds the size boundaries set by the larger of the national or county conforming loan limits, we have you covered. Purchase or refinance your high-value homes with our competitive suite of jumbo loan programs, covering loan amounts as high as $5 million or more for residential properties.
Jumbo loans allow homebuyers and homeowners to access financing suitable for high-value properties. A loan attains "jumbo" status upon surpassing the conforming loan limits set by the Federal Housing Finance Agency (FHFA). The higher of the national or county-level conforming loan limit is what will determine whether your loan is a jumbo loan or not.
Let's take a closer look at this program:
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Usually No Mortgage Insurance Even Below 20% Down
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Typically 10% Down Minimum (We Offer Options for Less)
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Max Loan Size and Guidelines Vary Greatly Across Different Lenders
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Not Uncommon For Two Appraisals to Be Required (Size/LTV Dependent)
When financing large loans, the lender takes on more risk, which leads to guidelines that may be more strict and/or rates that are higher than loans that stay within the boundaries of conforming loan limits. But for the many people who can afford to finance pricey homes, but not buy them outright, jumbo financing is a useful solution.
Jumbo Loans
Minimum FICO Score: Varies, Ideally 700+
Available Loan Terms: 5-30 Years
Minimum Down Payment: Varies, 10% Typical
Maximum Rate/Term Refinance LTV: Varies
Maximum Cash Out Refinance LTV: Varies
Time From Bankruptcy: Varies
Time From Foreclosure/Short Sale: Varies
Mortgage Insurance (Y/N): Usually None
Eligible Use: Primary, Secondary, Investment
Eligible Properties: Residential 1-4 Unit Properties
(Condos & Townhomes Eligible, May Need HOA Review)
The most confusing aspect of a jumbo loan may reside in what exactly makes a loan "jumbo". There are two types of conforming loan limits, both of which that must be exceeded for your loan to be considered a jumbo loan: the national limit and county-level limits.
The first is the national conforming loan limit, which applies to every state in the US and is set by the FHFA. As of 2022, this limit is $647,200. Thus, any mortgage loan that is $647,200 or less is considered a "conforming loan". Any mortgage loan that exceeds this limit, even by a cent, may be considered a jumbo loan. Or so it may seem at first glance.
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What if you're looking to purchase or refinance a home located in a high cost of living (HCOL) area? In regions within HCOL states such as California or New York, $647,200 is a limit that may be regularly exceeded by even average mortgage loan sizes.
The county-specific conforming loan limit now comes into play. In HCOL areas, the county limits tend to be significantly higher than the national limit. For example, as of 2022, the Los Angeles County conforming loan limit is $970,800; this adds $323,600 of additional breathing room before a home loan enters jumbo territory. Many California county limits are similarly more generous than the national limit.
Your loan amount would have to extend beyond the limits of both the national and county limit in order to be classified as a jumbo mortgage.
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Jumbo loans are unique in that there is typically an absence of PMI or MIP across a majority of jumbo programs, even when committing a down payment of less than 20%.
Bear in mind that many jumbo lenders will require a second appraisal depending on several factors, but chiefly hinging on the size of the loan, as well as the LTV.
For borrowers seeking a loan amount that exceeds the conforming loan limit by a small amount, and would rather avoid the tighter guidelines and potentially higher pricing of a jumbo loan, there are ways to avoid jumbo loan designation. Speak to us on how we can make it happen.
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Getting Prepped for Approval
Documentation requirements for jumbo loans are generally very strict. Requirements are not too different than what is asked of conventional or government borrowers. However, the standard for income history and credit events are much less flexible than other loan programs, due to the larger size of the loan.
When lending large sums of money, mortgage lenders will demand strict vetting of a borrower's credit health and ability to repay. To see what documents you'll need for conventional loans, check out our prior to approval checklist page.