Jumbo loans: requirements, rates and how they differ from conforming

A jumbo mortgage is simply one too large for Fannie Mae and Freddie Mac to buy. The lender keeps it or sells it privately — which means the lender, not a federal agency, writes the rules.

Where jumbo starts

Above the conforming loan limit for your county — the FHFA baseline in most of the country, up to 150% of baseline in high-cost areas. A loan that fits under the county limit is never a jumbo, even if it is large by national standards.

Typical requirements

Down payment: 10% to 20% is standard; some lenders go to 5% or 10% for strong borrowers at moderate jumbo amounts, 25% or more on very large loans or second homes.
Credit score: 700 to 720 minimum at most lenders; 740+ for the best pricing.
Debt-to-income: usually capped at 43%, sometimes 45%.
Reserves: six to twelve months of full housing payments in liquid or semi-liquid assets after closing; more for multiple properties.
Documentation: full income documentation, two appraisals on very large loans, and manual underwriting — no automated approvals.
Mortgage insurance: generally not available; below 20% down, lenders price the risk into the rate or use a piggyback structure.

Rates

Jumbo rates move with the lenders’ own funding costs rather than agency pricing. For borrowers with large deposits and strong credit, jumbo rates are sometimes below conforming rates — banks use jumbos to win wealthy clients. For everyone else they are typically a quarter to a half point higher. ARMs are more common in the jumbo market, with larger discounts than on conforming loans.

Alternatives at the margin

Near the threshold, a larger down payment or a conforming first mortgage plus a second mortgage for the excess can keep you in the conforming market. In high-cost counties, high-balance conforming loans up to the county limit avoid jumbo rules entirely.

Frequently asked questions

Do jumbo loans have PMI?

Usually not. Lenders either require 20% down or build the risk into the rate; a few offer lender-paid mortgage insurance on jumbos at lower down payments.

Can I get a jumbo loan with a low credit score?

Rarely below 700. Non-QM and portfolio lenders sometimes go lower with large down payments and high rates.

Are jumbo loans harder to refinance?

Somewhat: the same reserve and documentation requirements apply each time, and fewer lenders compete. Keeping the loan conforming, if possible, preserves refinancing flexibility.