Jumbo Loans

Jumbo loans provide financing for loan amounts above the applicable conforming loan limit, making them an option for higher-priced homes and borrowers who need financing beyond conventional loan limits.

Best for

Jumbo loans are designed for homebuyers and homeowners who need financing above the conforming loan limit for their property. They can be used for primary residences, second homes, and investment properties, with loan amounts and qualifying requirements varying by lender and program.

Key terms (typical)

Attribute	Typical Range
Eligible properties	1–4 unit primary, second home, or investment
Down payment	10–20% typical; some programs go to 5% with strong credit
Credit score	Strong credit is generally expected; requirements vary by lender and loan amount
Loan amounts	Above the applicable conforming loan limit; maximums vary substantially by program
Reserves	Additional cash reserves are commonly required
Term	30 years fixed; 15 year; ARM options available
Debt-to-income	Typically capped at 43%; some programs to 45%

Why borrowers choose this program

• Loan amounts beyond conforming limits. Jumbo is how higher-priced homes get financed once conventional loan limits run out.
• Competitive rates. Despite the name, jumbo rates are often comparable to or even better than conforming rates for strong borrowers, large banks compete aggressively for high-balance loans from creditworthy borrowers.
• Interest-only options. Some jumbo programs offer interest-only payment options for a portion of the loan term, useful for cash flow management.
• Property flexibility. Like conventional, jumbo can finance primary, second home, and investment properties, at higher loan amounts.

Considerations

• Tighter qualifying. Jumbo underwriting is more conservative than conventional: higher credit score minimums, larger reserves, tighter DTI caps, full documentation.
• Larger down payment typical. Most jumbo programs require 10–20% down. Lower down payment jumbo exists but typically for very strong borrowers.
• More documentation. Expect tax returns, bank statements, asset documentation, and possibly business returns, more paperwork than a conforming loan.