Question 1

What is a jumbo loan?

Accepted Answer

A jumbo loan exceeds the conforming loan limit set by FHFA. In 2024, the limit is $766,550 (up to $1,149,825 in high-cost areas). Any mortgage above this limit is a jumbo loan. Jumbo loans have stricter requirements and slightly higher rates.

Question 2

What are jumbo loan requirements?

Accepted Answer

Typical requirements: 700+ credit score (sometimes 720+), 10-20% down payment, 43% max DTI ratio, 6-12 months of reserves (payments saved), lower debt-to-income ratio than conforming. Requirements vary by lender; some portfolio lenders are more flexible.

Question 3

Are jumbo loan rates higher?

Accepted Answer

Jumbo rates are typically 0.25-0.75% higher than conforming rates. Higher risk (larger amount, no government backing) means higher rates. However, some portfolio lenders offer competitive jumbo rates, especially for excellent credit borrowers.

Question 4

What is a piggyback loan alternative to jumbo?

Accepted Answer

Piggyback (80-10-10): conforming first mortgage up to limit + 10% second mortgage + 10% down. Avoids jumbo rates, no PMI. Example: $800K home = $766K conforming first + $80K second + $80K down. Works when total needed is close to conforming limit.

Question 5

Can I use FHA or VA for a jumbo loan?

Accepted Answer

No. FHA loans have limits ($498K-$1.15M depending on county). VA loans have no official limit with full entitlement, but lenders may cap at conforming + 25%. For true jumbo amounts, conventional jumbo or portfolio loans are the primary options.

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