Jumbo Home Loans

A jumbo loan is a mortgage that has a balance higher than the conforming loan limit for the county you’re buying or refinancing in. In most places, the conforming loan limit is $726,200.

Fannie Mae and Freddie Mac will only purchase mortgage loans that fall under the conforming loan limit. Because Fannie and Freddie’s willingness to buy conforming loans lowers the risk for lenders, conforming loans are usually easier to qualify for.

Non-conforming loans (or jumbo loans) on the other hand, require a higher credit score, bigger down payment, and more in cash reserves due to the added risk they carry.

Who is eligible for a Jumbo Loan?

In most cases, jumbo loans are best reserved for buyers in strong financial standing or who earn a high income. But depending on where you’re buying a home, a jumbo loan might be the only option due to high home prices.

Jumbo Loan Requirements

  • Minimum down payment: Typically between 10% and 30%

  • Max debt-to-income ratio: 38% - 43%

  • Minimum credit score: Can be as low as 680, but typically 700 or higher

  • Documents needed: Might require additional income documentation and tax returns, especially if you are self-employed

  • Cash reserves: 6-18 months of mortgage payments

  • Appraisals: A second appraisal might be required