Jumbo Loans: Financing Above Conforming Loan Limits

Answer

When your desired mortgage amount exceeds the limits set by Fannie Mae and Freddie Mac, you’ll look at a jumbo loan—a mortgage designed for high-value properties that don’t fit within standard conforming limits.

Here’s what sets jumbo mortgages apart:

• Loan size: In 2025, the baseline conforming limit for a single-family home is $726,200 in most U.S. counties (higher in high-cost areas). Any mortgage above this threshold qualifies as a jumbo loan.
  (Source: HUD Conforming Limits)
• Qualification standards: Lenders demand stronger financial profiles. Expect a minimum credit score of 700–720, though some lenders may accept slightly lower scores with compensating factors.
• Down payment and reserves: Jumbo loans often require at least 10–20% down and may ask for several months of cash reserves in your bank account to cover mortgage payments after closing.
• Interest rates: Rates can be comparable to conforming loans, but expect slightly higher margins—especially if your credit profile or reserves don’t meet top-tier benchmarks.
• Property types: You can use jumbo financing for primary residences, second homes or investment properties. Qualification criteria may tighten further for non-owner-occupied homes.
• Loan terms: Available in both fixed-rate and adjustable-rate (ARM) options, with terms typically ranging from 15 to 30 years.
• Documentation: Prepare extensive paperwork: two years of tax returns, W-2s, profit & loss statements (if self-employed), bank and investment statements, and proof of reserves.

Because jumbo loans carry higher risk for lenders, you’ll encounter more stringent underwriting than with conforming mortgages. Buyers are recommended to compare offers from multiple jumbo-approved lenders to find competitive rates and flexible terms.
Before committing to a large-loan mortgage, it’s advisable to consult a licensed mortgage professional and verify eligibility requirements based on your specific financial situation and the property location.