Threshold
Above conforming limit
$766K (2024) in most areas; up to $1.15M+ in high-cost counties. Above this = jumbo. Below = conforming (Fannie/Freddie eligible).
Jumbo Loans · above the conforming line
Bigger loan.
Different rules.
Above $766K (most counties) you're in jumbo territory. Lenders hold these in-house instead of selling to Fannie/Freddie. Stricter underwriting, more reserves required, but rates can sometimes BEAT conventional.
· Jumbo basics
Five facts.
Different from conforming.
Down payment
10-20% typical
Some jumbo programs go to 5% down with strong credit + reserves. Most expect 10-20%. Larger loan = more skin in the game required.
Credit
Higher floor (typically 700+)
Most jumbo lenders want 700+ credit. Some specialize in 660-680 with compensating factors. Pricing penalties get steep below 720.
Reserves
6-18 months PITI required
Lenders want to see substantial liquid reserves AFTER closing. Larger jumbos = more months required. Some go to 24+ months for $2M+ loans.
DTI
Tighter DTI: 38-43%
Jumbo lenders prefer lower DTI. Some go to 45% with strong files; most cap at 43%. DTI math matters more than on conforming.
· Watch-outs
Four traps
in jumbo financing.
Pitfall 01
Comparing to conforming pricing.
Jumbo isn't always more expensive. Some programs (especially for portfolio jumbo from local banks) BEAT conforming. Always shop both.
Pitfall 02
Forgetting the reserves requirement.
Even with cash for the down payment, you may not qualify if your post-closing reserves are too low. Plan accordingly.
Pitfall 03
Skipping local + regional banks.
National lenders quote retail jumbo. Local + regional banks often have portfolio products with better terms — they hold the loan, so they price it.
Pitfall 04
Not understanding non-QM jumbo.
Some jumbos use non-QM (non-Qualified Mortgage) underwriting — bank statements, asset depletion, foreign nationals. Different rules. Different costs. Specialty product.
Jumbo is a specialty product.
Find an LO who does them.
Most LOs do conforming all day. Jumbo requires depth. Five minutes with the assessment routes you to a jumbo-savvy LO.