What Makes a Loan 'Jumbo'
Any loan amount above the conforming limit set annually by the FHFA is considered jumbo, since Fannie Mae and Freddie Mac won't purchase loans above that threshold — meaning lenders keep more risk on their own books and price accordingly.
Jumbo Loan Requirements
| Requirement | Typical Minimum |
|---|---|
| Credit Score | 700+ |
| Down Payment | 10-20% |
| Debt-to-Income | 43% or lower |
| Cash Reserves | 6-12 months of payments |
Why Jumbo Rates Run Higher
Because lenders can't offload jumbo loans to Fannie Mae or Freddie Mac, they hold more risk directly and typically price jumbo rates 0.15-0.30 percentage points above conforming rates, though this gap narrows and widens with market conditions.
Alternatives to a Jumbo Loan
Some buyers use a combination of a conforming first mortgage plus a second loan (a 'piggyback' structure) to avoid jumbo pricing altogether — worth asking a lender to model both options.
This page is for educational purposes and isn't personalized financial or tax advice. Figures, rates, and program details change frequently — confirm current terms directly with lenders, tax professionals, or the IRS before acting.