JUMBO Loans
What is a JUMBO Loan?
A jumbo loan is a type of mortgage financing used to fund properties that exceed the limits set by conventional conforming loans. In 2026, the maximum amount for a conforming loan in most counties is $832,750, as determined by the Federal Housing Finance Agency (FHFA). Properties that surpass the local conforming loan limit require the use of a jumbo loan.
Known as non-conforming conventional mortgages, jumbo loans carry a higher risk for lenders since they do not have the backing of Fannie Mae and Freddie Mac. This lack of guarantee means lenders face potential losses if a borrower defaults. Jumbo loans are typically available with either a fixed or adjustable interest rate and come in various terms.
Qualifying for a jumbo loan involves stricter underwriting criteria due to the larger and riskier nature of these home loans. Lenders usually require a FICO score of 700 or higher, with some necessitating a score of 720. Debt-to-income ratios are closely examined, often capped at a maximum of 45%. Possessing significant cash reserves, usually sufficient to cover one year of mortgage payments, enhances the likelihood of approval. Additionally, applicants must provide extensive documentation, including tax returns, W-2s, 1099s, bank statements, and details about investment accounts. A second home appraisal for the property being purchased is also typically required.
Jumbo loans differ from conforming loans mainly in their size. They often necessitate a substantial down payment, usually around 20%, though it can be as low as 10%. While jumbo mortgage rates may be slightly higher, competitive options are available. Due to their size and the additional qualifying steps involved, jumbo loans generally incur higher closing costs and fees.