Loan programs
Jumbo loans
Any mortgage above the conforming limit for your county. The lender keeps the risk instead of selling it on, so the standards are theirs. And they are stricter.
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At a glance
- Credit scoreTypically 700+Some lenders want 720 or 740
- Down paymentOften 10 to 20%Larger on bigger loan amounts
- ReservesSeveral monthsSometimes 6 to 12 months of payments
- Loan limitAbove conformingLimit set each year by the FHFA
Jumbo in numbers
A higher bar on every measure
Conforming loan limits set annually by the FHFA.
A jumbo loan is any mortgage above the conforming limit for your county. The Federal Housing Finance Agency sets that limit each year.
It cannot be sold to Fannie Mae or Freddie Mac, so the lender keeps the risk. Everything else follows from that.
Loan program
Jumbo at a glance
Any mortgage above the conforming loan limit
The requirements
What you need to qualify
| Requirement | Typical minimum | Worth knowing |
|---|---|---|
| Credit score | Typically 700+ | Some lenders require 720 or 740 |
| Down payment | 10% to 20% | Higher on larger loan amounts |
| Debt-to-income | Often tighter | Many lenders cap around 43% |
| Reserves | Several months | Can be 6 to 12 months of payments |
| Loan amount | Above the conforming limit | Varies by county, set annually |
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These are the lowest a program allows. Lenders often want more. That is called an overlay. Compare all five programs →
The detail
What makes this program different
The threshold moves, and it is local
The limit changes each year and is higher in expensive counties. The same loan can be conforming in one place and jumbo an hour away.
Reserves matter more than anywhere else
Lenders want several months of full housing payments left in the bank after closing. On larger loans that can mean six to twelve months.
Documentation is heavier
Expect closer checks on your income, more questions about deposits, and sometimes two appraisals.
Rates are not always higher
Jumbo rates have at times matched or beaten conforming rates. Do not assume a penalty. Compare real quotes.
Splitting the loan is an option
Some buyers take a conforming first mortgage plus a second loan to stay under the limit. Whether that beats one jumbo depends on the pricing that day.
Honestly
Is a jumbo loan right for you?
Good fit if
- The purchase price puts you above the conforming limit for the county
- Your credit is strong and your income well documented
- You have significant savings left after the down payment
- You would rather one loan than a split structure
Look elsewhere if
- Your loan amount fits under the conforming limit
- Your reserves are thin after closing
- Your income is difficult to document on paper
- A conforming first plus a second loan prices better on the day
Being honest
When a jumbo loan is the wrong choice
Sometimes the answer is to borrow slightly less rather than cross the threshold.
You are just over the conforming limit
If a larger deposit brings the loan under the limit, a conforming conventional loan is usually cheaper and easier to underwrite. The gap between the two is worth real money.
Your reserves are thin
Jumbo lenders commonly want six to twelve months of payments left after closing. A buyer who can afford the deposit but not the cushion will struggle regardless of income.
Your income is complex and recent
Jumbo underwriting is manual and conservative. Newly self-employed income, heavy equity compensation or a short bonus history all get scrutinised harder here than on a conforming file.
You need certainty on a tight timeline
Manual underwriting means a person reads the whole file. That is slower and less predictable than an automated conforming approval.
The exit
The conforming limit, and why it moves
A jumbo loan is simply any mortgage above the conforming loan limit. Below that line, loans can be sold to Fannie Mae or Freddie Mac. Above it they cannot, so the lender carries more risk and prices accordingly.
The limit is set annually by the Federal Housing Finance Agency and varies by county. High-cost areas carry a higher ceiling than the national baseline. Because it changes each year, we do not publish a figure here that would be wrong by January.
Ask a loan officer for the current limit in the specific county you are buying in. In some markets a modest increase in your deposit moves you under it, and that one change can improve your rate, your reserve requirement and your underwriting path all at once.
Questions
Common questions
What makes a loan jumbo?
Any amount above the conforming loan limit for the county where you are buying. The Federal Housing Finance Agency sets those limits each year, and they are higher in expensive areas.
What credit score do you need for a jumbo loan?
Usually 700 or above, and some lenders want 720 or 740. Because the lender keeps the loan rather than selling it, the standards are set by their own risk appetite.
How much do you need to put down on a jumbo loan?
Often between 10 and 20 percent, with more expected on larger amounts. Some lenders go lower for very strong borrowers.
Do jumbo loans have higher rates?
Not always. Jumbo pricing has at times matched or beaten conforming rates. Compare real quotes rather than assuming a premium.
What are jumbo reserve requirements?
Lenders typically want several months of full housing payments left after closing, and six to twelve months is common on larger loans. Retirement accounts often count at a discounted value.
Keep reading
Related guides
Conventional loans
What sits just below the jumbo threshold.
How to qualify
The four factors, and where jumbo differs.
Will I get approved?
Reading whether your file is on track.
Independent sources
- Federal Housing Finance Agency — the conforming loan limit, set annually by county
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