At a Glance
- Down payment as low as 10-20%
- Minimum credit score of 700+
- Best for high-value property purchases
When your dream home exceeds conventional loan limits, a jumbo loan provides the financing you need. These loans are designed for high-value properties and luxury homes, offering substantial loan amounts with competitive terms for well-qualified borrowers.
What Makes a Loan "Jumbo"?
A jumbo loan exceeds the conforming loan limits set by the Federal Housing Finance Agency. For 2024, this means loan amounts above $766,550 in most areas (higher in expensive markets like California and New York). These loans are not eligible for purchase by Fannie Mae or Freddie Mac.
Qualification Requirements
Because jumbo loans represent larger risk for lenders, qualification requirements are typically stricter. Expect to need excellent credit (usually 700+), substantial assets, a larger down payment (often 10-20%), and a lower debt-to-income ratio. Documentation requirements are also more thorough.
Interest Rates and Terms
Historically, jumbo loan rates were higher than conforming loans, but today they're often competitive and sometimes even lower. Jumbo loans are available in fixed and adjustable-rate options with various term lengths. Some programs offer interest-only options for qualified borrowers.
Eligibility Requirements
- Excellent credit score (typically 700-720+)
- Down payment of 10-20% or more
- Lower debt-to-income ratio (usually under 43%)
- Substantial cash reserves (often 6-12 months)
- Thorough income and asset documentation
- Property appraisal from qualified appraiser
Frequently Asked Questions
Are jumbo loan rates higher than conventional?
Not necessarily. Jumbo rates are often competitive with conforming loans and sometimes even lower, depending on your qualifications.
Can I get a jumbo loan with less than 20% down?
Some programs offer jumbo loans with 10% down, though PMI may be required. Terms vary by lender and qualification.
Is there a maximum jumbo loan amount?
Maximum amounts vary by lender. Many offer jumbo loans up to $2-3 million, with some extending to $5 million or more for qualified borrowers.