Jumbo loans are non-conforming loans that exceed the limits set by Freddie Mac and Fannie Mae. The conforming loan limit in 2024 for a one-unit property in most areas is $766,550, and $1,149,825 in High Cost areas1. Loan limits can change annually, so double check the link below for updates. Loans greater than these limits are usually called jumbo mortgages but can also be called non-conforming mortgages.
Underwriting criterion can vary from Fannie Mae and Freddie Mac as they are held by banks or institutional lenders. These differences include down payment requirements, credit score requirements, debt to income ratios, to name a few. Jumbo lenders also have reserve requirements, meaning leftover funds after the borrower pays the down payment2 and closing costs3.
These different requirements will vary depending on the total loan amount, the amount of down payment, and the credit scores. These underwriting parameters will vary from lender to lender who offer jumbo loans. When in the market for a jumbo loan, it is important to speak with a loan officer who is familiar with these various lenders and the varying parameters to find the lender that best suits a borrower’s needs.
1. High Cost areas are set by FNMA and FHLMC and can be found here https://singlefamily.fanniemae.com/originating-underwriting/loan-limits
2. See Down Payment
3. See Closing Costs
