What are jumbo loans?
Jumbo loans are essentially mortgages that are larger than the minimum amounts allowed by Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) guidelines. It is up to your lender to decide the maximum amount for jumbo loan limits because these agencies haven’t set upper limits for them.
Investment properties, second homes, and primary residences can all be financed with a jumbo mortgage. Jumbo loans can be refinanced to change the term length, the interest rate, or, in the case of primary residences, to withdraw cash, just like regular mortgage loans.
Minimum and maximum loan amounts
Take into account the conforming loan limits if you’re unsure if you’ll need a jumbo loan. Jumbo loans can be compared to the agency-set maximum limits for these loans.
There is a single maximum loan amount for conforming loans in the majority of the nation. In some high-cost areas, such as Washington D. C. and some counties in California have a higher maximum conforming loan threshold.
For 2024, the Federal Housing Finance Agency (FHFA) raised the maximum conforming loan limit for a single-family property to $766,550 from $726,200 (in 2023). In certain high-cost areas, the ceiling for conforming mortgage limits is 150% of that limit, or $1,149,825 for 2024.
View our county-by-county chart below to see which counties have conforming loan limits beyond the $766,550 standard by 2024.
Remember that the FHFA might raise conforming loan limits once more in 2025. For information on updated loan limits in 2025, return here if you intend to obtain a mortgage loan.
Why do conforming loans have limits?
Every year, the FHFA establishes county-specific maximum limits for conforming loans. Above those ceilings, any loan is referred to as a jumbo loan and is non-conforming, meaning that it is larger than what government-sponsored enterprises like Fannie Mae or Freddie Mac will purchase or insure. Lenders assume greater risk since jumbo loans cannot be sold to either of these businesses.
Jumbo loan requirements
Lenders place stricter requirements on jumbo loans than they might for traditional loans because they signify taking out a larger-than-typical mortgage. To determine whether you can afford a larger mortgage and whether you will be able to repay it on time, they will look at a number of financial health factors.
Lenders will look at the following benchmarks:
- Credit score: Normally, a jumbo loan requires a credit score of at least 680.
- Debt-to-income (DTI) ratio: Generally, lenders prefer low DTI ratios, of no more than 40%.
- Down payment minimum: Although a 20% down payment may not be necessary for loans that comply, some lenders may require a 20% down payment (or more) for jumbo loans. Based on the location of the property, Ally Home offers down payments as low as 10. 01%.
Additionally, a lot of lenders will verify that you have sufficient cash on hand to pay your mortgage for the next six to twelve months.
What are jumbo loan rates?
In return for your financing company lending you the jumbo mortgage amount, you must pay interest, as is the case with most loans. The terms and mortgage type you select will determine whether your rate is fixed or adjustable. Federal Reserve benchmarks and individual factors can affect rates, which can fluctuate.
Jumbo loan limits by state
The following chart displays the U.S. jumbo loan limits for 2024. S. counties and territories where the maximum loan amount allowed is higher than the average $766,550 for a single-family home If a county or state is not on the list, then the standard
| State | Counties | One-unit Limit |
|---|---|---|
| Alaska | All | $1,149,825 |
| California |
Alameda County Contra Costa County Los Angeles County Marin County Orange County San Benito County San Francisco County San Mateo County Santa Clara County Santa Cruz County |
$1,149,825 |
| Napa County | $1,017,750 | |
| San Diego County | $1,006,250 | |
| Ventura County | $954,500 | |
| San Luis Obispo County | $929,200 | |
| Monterey County | $920,00 | |
| Sonoma County | $877,450 | |
| Santa Barbara County | $838,350 | |
| Colorado | Eagle County Garfield County Pitkin County | $1,149,825 |
| Routt County | $1,012,000 | |
| Summit County | $1,006,250 | |
| San Miguel County | $994,750 | |
| Boulder County | $856,750 | |
| Adams County Arapahoe County Broomfield County Clear Creek County Denver County Douglas County Elbert County Gilpin County Jefferson County Park County | $816,500 | |
| Washington, D.C. | District Of Columbia | $1,149,825 |
| Florida | Monroe County | $929,200 |
| Guam | Guam | $1,149,825 |
| Hawaii | All | $1,149,825 |
| Idaho | Teton County | $1,149,825 |
| Maryland |
Calvert County Charles County Frederick County Montgomery County Prince Georges County |
$1,149,825 |
| Massachusetts |
Dukes County Nantucket County |
$1,149,825 |
|
Essex County Middlesex County Norfolk County Plymouth County Suffolk County |
$862,500 | |
| New Hampshire |
Rockingham County Strafford County |
$862,500 |
| New Jersey |
Bergen County Essex County Hudson County Hunterdon County Middlesex County Monmouth County Morris County Ocean County Passaic County Somerset County Sussex County Union County |
$1,149,825 |
| New York |
Bronx County Kings County Nassau County New York County Putnam County Queens County Richmond County Rockland County Suffolk County Westchester County |
$1,149,825 |
| Pennsylvania | Pike County | $1,149,825 |
| Tennessee |
Cannon County Cheatham County Davidson County Dickson County Macon County Maury County Robertson County Rutherford County Smith County Sumner County Trousdale County Williamson County Wilson County |
$943,000 |
| Utah |
Summit County Wasatch County |
$1,149,825 |
|
Wayne County |
$997,050 | |
| U.S. Virgin Islands |
St. Croix Island St. John Island St. Thomas Island |
$1,149,825 |
| Virginia |
Alexandria City Arlington County Clarke County Culpeper County Fairfax City Fairfax County Falls Church City Fauquier County Fredericksburg City Loudoun County Madison County Manassas City Manassas Park City Prince William County Rappahannock County Spotsylvania County Stafford County Warren County |
$1,149,825 |
| Washington |
King County Pierce County Snohomish County |
$977,500 |
| West Virginia | Jefferson County | $1,149,825 |
| Wyoming | Teton County | $1,149,825 |
How to shop for a jumbo loan
Make sure to investigate several lenders so you can compare things like interest rates and loan requirements. To make sure you find a lender who meets your needs and timeline, you should also review the loan terms that are being offered. Obtaining pre-approval for a mortgage or applying to multiple lenders for multiple loan estimates is generally advised in order to ensure that you are prepared to close on the deal.
Is a jumbo loan right for you?
If you are looking to buy a larger house, you may also be considering a jumbo mortgage. Therefore, as you look for a home, be sure to monitor the current jumbo loan limits, as they are subject to change every year. Making the best choice for your financial circumstances may be aided by speaking with a home loan specialist.
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FAQ
What’s considered a jumbo loan in 2023?
Jumbo loans are intended for borrowers who require a larger loan amount than the $726,200 conforming loan limit as of 2023. Because of their higher cost of living, some states have higher conforming loan limits. For instance, anything over $1,089,300 is considered a jumbo loan in Hawaii.
What is Max jumbo loan?
California jumbo loan rates and limits: In California, the jumbo loan limit varies according to the county in which you are attempting to purchase a residence. The CCL is $647,200 in the majority of counties and may reach $970,800. Jumbo mortgage rates are typically higher than those of conforming loans.
Has Fannie Mae announced 2023 loan limits?
Fannie Mae addresses the limits in Lender Letter 2023-09. As anticipated given the ongoing rise in housing costs, the limits dramatically increased. In 2024, the standard loan limit for a single-family home was raised to $766,550 from $726,200 in 2023.
What is the new loan limit for 2024?
For a single-unit property in 2024, the national conforming loan limit is $766,550. For a single-unit property, FHA’s minimum national loan limit floor for 2024 is $498,257, which is equivalent to 65% of the national conforming loan limit.
Read More :
https://www.ally.com/stories/home/jumbo-loan-limits/
https://smartasset.com/mortgage/what-are-jumbo-loan-limits