What Is a Jumbo Loan?
Requirements for a jumbo loan | 2022 jumbo loan limits | Alternatives | Summary | FAQs
A jumbo loan is a home loan that exceeds the annual conforming loan maximums set by the Federal Housing Finance Agency (FHFA), which regulates Freddie Mac and Fannie Mae.
In 2022, the jumbo loan limit for single-family homes is $647,200 (for conventional loans) and $420,900 (for FHA loans), with some exceptions in designated high-cost markets.
If you have your sights set on a home that requires a mortgage exceeding those limits, a jumbo loan may be the answer.
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At a glance: Financial requirements
| Lender (jump to see more details) | Credit score | Down payment |
| Fannie Mae or Freddie Mac (conventional) | 700 | 10–20% |
| Federal Housing Administration (FHA) | 600 | 3.5% |
| Department of Agriculture (USDA) | 640 | N/A |
| Veterans Affairs (VA) | 640 | Depends on entitlement |
What you'll need and what to expect for a jumbo loan
Because lenders take on more risk when they extend jumbo loans, the eligibility requirements are stricter than when qualifying for a conventional loan.
Higher credit score |
A FICO score of 680 is typically the lowest acceptable credit score. But many jumbo lenders set the limit as high as 720. By contrast, you can qualify for some conforming loans with a score as low as 600. |
More cash reserves |
You should have healthy bank statements reflecting ample savings and good cash flow. Lenders like to see enough cash reserves to cover a year of mortgage payments. Investment accounts and proof of other assets can be helpful. |
Low debt-to-income ratio |
Your debt-to-income ratio (DTI) should demonstrate that you can afford to pay your jumbo mortgage. Lenders generally like a DTI between 36% and 45%. |
Larger down payment |
Jumbo lenders require a substantial down payment to lower their own risk — typically 20–30%, though the minimum amount varies by lender. You may qualify for a smaller down payment if your credit score is high. |
Higher closing costs |
You’ll likely pay for additional services as part of closing, like a second-opinion appraisal. Your loan origination fee and
other costs are usually higher, too. |
Potentially lower interest rates |
Historically, jumbo loan interest rates were higher than conventional loan rates. But the spread between jumbo rates and conforming loan rates started narrowing a few years ago. In 2022, conforming loan rates have overtaken jumbo loan rates.[ 1] |
Solid income documentation |
Be prepared to provide two to three years of bank statements, tax returns, and W-2s or 1099 statements. |
If you’re not on board with the jumbo loan requirements, you may want to bring the loan amount below the conforming loan limit by either:
- Taking out a piggyback loan (learn more)
- Making a much larger down payment
Jumbo loan limits (2022)
See jumbo limits by loan type: Conventional | FHA | USDA | VA
Conventional jumbo loan
Conventional jumbo loans are home mortgages exceeding the annual lending limits set by the Federal Housing Finance Agency (FHFA).
Property type | Low-cost areas* | High-cost areas** |
|---|---|---|
1-unit homes | $647,200 | $970,800 |
2-unit homes | $828,700 | $1,243,050 |
3-unit homes | $1,001,650 | $1,502,475 |
4-unit homes | $1,244,850 | $1,867,275 |
* Continental U.S., Washington, DC, and Puerto Rico ** Alaska, Hawaii, Guam, and the U.S. Virgin Islands | ||
FHA jumbo loan
Lending limits for FHA loans are state and county specific. But the baseline is $420,900, with a max debt-to-income ratio of 43%.
Property types | Low-cost areas | High-cost areas |
|---|---|---|
1-unit homes | $420,900 | $970,800 |
2-unit homes | $538,800 | $1,243,050 |
3-unit homes | $651,300 | $1,502,475 |
4-unit homes | $809,450 | $1,867,275 |
Source: U.S. Department of Housing and Urban Development, 2022 | ||
» MORE: FHA loan qualifications
USDA jumbo loan
USDA loans have no lending limits, unlike conventional or FHA loans. Instead, USDA loans have income limits for borrowers to be eligible.
Other requirements for USDA loans include homes being in eligible rural areas and additional fees for borrowers.
Household size | Income limit range |
|---|---|
1–4 people | $103,500–238,200 |
5–8 people | $136,600–314,400 |
Source: U.S. Department of Agriculture, 2022; exact figures vary by county | |
» MORE: USDA loan qualifications
VA jumbo loan
The VA doesn’t cap loan amounts, but it does insure the loans to a certain point, which can affect how much you can comfortably borrow.
Eligible borrowers can typically borrow up to four times the guarantee amount. The VA even guarantees jumbo loans for veterans who have full entitlement. With partial entitlement, the guaranteed amount is based on the FHFA conforming loan maximums.
[inline-faq-drawer="What's an entitlement?"]
Exact amounts vary by whether VA borrowers have full or partial entitlement — basically, whether eligible service members have used certain benefits. Full entitlement means borrowers can tap into maximum benefits, while partial entitlement means there are restrictions.[/inline-faq-drawer]
Full entitlement | Partial entitlement | |
|---|---|---|
Loan limits | None | $647,200–970,800 (depending on location) |
Down payment | N/A | Varies by lender and county |
Liability range | 25% of guaranteed amount on loans over $144,000 | 25% of guaranteed amount |
» MORE: VA loan qualifications
💡 Editor's tip: Get below the jumbo limit with a piggyback loan
With a piggyback loan (also known as a blended mortgage), you’ll need two mortgages on your high-cost home:
- First, take out a conforming loan at the max amount with the required down payment (usually 10%).
- Next, get a second home loan for the remaining amount.
Example
Purchase price | $900,000 |
Down payment (10%) | $90,000 |
First mortgage | $647,200 |
Second mortgage Purchase price – (down payment + first mortgage) | $162,800 |
Your second loan will have a higher interest rate than your first mortgage. But the combined payments may still be lower than a single mortgage payment at a jumbo interest rate.
However, it depends on the current market rates, second mortgage terms, and loan amounts. Explore your options with your lender and realtor to make sure there are no surprises!
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Summary
- In most areas, the 2022 FHFA conforming loan limit (CLL) for a single-family house is $647,00. High-cost markets have limits up to $970,800.
- Borrowers may qualify for jumbo loans with government-backed programs, like VA, FHA, and USDA loans. Conventional lenders also offer jumbo loans.
- Jumbo mortgages have stricter eligibility requirements than their CLL counterparts — but possibly lower interest rates.
FAQs about jumbo loans
Jumbo loans are high-dollar mortgages greater than the yearly government-set standard for conforming loans.
Conventional mortgage lenders typically require a 20% down payment on jumbo loans. FHA jumbo loans may require as little as 3.5% down, and eligible borrowers can get VA jumbo loans with no down payment.
A 30-year jumbo loan is a mortgage that exceeds the current conforming loan limit in the relevant county with a 30-year repayment term.
A jumbo loan on a single-family home is typically for more than $647,200.