Jumbo Loans in California
Jumbo loans are mortgages that are used exclusively for financing properties that are too expensive for conventional conforming loans. Homes that exceed the local conforming loan limits set by the Federal Housing Finance Agency (FHFA) require a jumbo loan.
If you are shopping for a home in a high-cost area, you may need a Jumbo loan.
Here’s what you should know about Jumbo loans:
Here's what you should know about Jumbo loans:
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What is a Jumbo loan?
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Requirements for a Jumbo loan
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What loan size is considered Jumbo?
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Is a Jumbo loan right for you?
What is a Jumbo loan?
Jumbo loans work the same way as any other mortgage, except the loan amount is higher. However, they differ from Conventional Conforming Loans because unlike these, Jumbo loans are not guaranteed by Fannie Mae and Freddie Mac. Since they can't be resold, Jumbo loans generally remain on the lenders' own books, making them a type of portfolio loan. They tend to have stricter requirements because they are considered riskier for lenders at these higher amounts. You will need to show strong credit, income, and plenty of reserves in order to qualify for a Jumbo loan.
What are the requirements for a Jumbo loan?
Down Payment
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Jumbo loan down payments usually start at 10%, but depending on your other assets, you could be required to put down more — perhaps even going above 20%.
Credit Score
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The stronger your credit, the better. Most lenders require a score above 700, but some require a minimum of 740-760 to even qualify. A credit score above 760 will always result in much better pricing.
Debt-To-Income Ratio
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Maximum 43-45% debt-to-income (DTI) depending on the lender. They may be more flexible depending on the strength of your reserves and credit profile.
What loan size is considered a Jumbo loan?
Jumbo loan limits vary depending on where you live. In most places in the U.S. in 2024, a jumbo loan is required to buy a property that costs more than $766,550. However, in some high-cost markets, the conforming limit can go up to $1,149,825 for a 1-unit property.
Below are all of the high-balance counties in California. Any loan amount higher that what is listed for that county will require a Jumbo loan.
ALAMEDA COUNTY LOAN LIMIT:
$1,149,825
CONTRA COSTA COUNTY LOAN LIMIT:
$1,149,825
LOS ANGELES COUNTY LOAN LIMIT:
$1,149,825
MARIN COUNTY LOAN LIMIT:
$1,149,825
MONTEREY COUNTY LOAN LIMIT:
$920,000
NAPA COUNTY LOAN LIMIT:
$1,017,750
ORANGE COUNTY LOAN LIMIT:
$1,149,825
SAN BENITO COUNTY LOAN LIMIT:
$1,149,825
SAN BERNARDINO COUNTY LOAN LIMIT:
$1,006,250
SAN DIEGO COUNTY LOAN LIMIT:
$1,006,250
SAN FRANCISCO COUNTY LOAN LIMIT:
$1,149,825
SAN LUIS OBISPO COUNTY LOAN LIMIT:
$929,200
SAN MATEO COUNTY LOAN LIMIT:
$1,149,825
SANTA BARBARA COUNTY LOAN LIMIT:
$838,350
SANTA CLARA COUNTY LOAN LIMIT:
$1,149,825
SANTA CRUZ COUNTY LOAN LIMIT:
$1,149,825
SONOMA COUNTY LOAN LIMIT:
$877,450
VENTURA COUNTY LOAN LIMIT:
$954,500
Is a Jumbo loan right for you?
Jumbo loans are meant for borrowers purchasing high-cost homes and who have the means to do so. Because jumbo loans have tighter qualifications, you will need to have substantial down payment savings, cash reserves, a low debt-to-income ratio and a strong credit score.