The conforming loan limit changes typically every year and it was just raised to $802,650 for a single family property for conventional financing, so for all practical purposes a Jumbo is a loan higher than that or $802,651 and up. For a Duplex it is $1,027,750, Triplex $1,242,250 and a Four-plex $1,543,900.
There are some other variables though. If you live in a high cost area (Think San Francisco or L.A.) then the High Balance loan limit is $1,149,825 for a Single Family, $1,472,250 for a Duplex, $1,779,525 for a Triplex and $2,221,600 for a Four-plex.
Last exception to all of these rules is Alaska and Hawaii are in their own category with just one option of $1,203,975 for Single Family, $1,541,625 for a Duplex, $1,863,375 for a Triplex and $2,315,850 for a Four-plex.
OK, so the word Jumbo conjures up a mind picture of shopping at Costco or uh…shrimp (my favorite oxymoron – Jumbo Shrimp), but loans? What difference does it make anyway if it’s Jumbo or conforming? Well, it has to do with investors and what they are willing to invest in and what they aren’t. In general many investors follow the Fannie Mae guidelines so closely that they will actually let you run your scenario through the Fannie Mae automated underwriting engine and will take the Findings, even though they will give an “ineligible” response and then use those for part of their underwriting. Other investors have their own rules about such things.
Here is a brief rundown on what is typical to expect on a Jumbo loan – note that not all things are necessarily true for any particular loan scenario. These are just parameters.
- Loan amounts up to $3 Million
- As little as 10.01% down payment on a purchase
- Credit scores down to 660
- Works for most properties – Single Family through 4 units, PUD and Condo
- OK to own other properties – up to 10 properties – in some cases 15
- OK for first time homebuyers
- Many programs allow payoff of existing debts in order to qualify
- Ratios in some cases can go up to 50%
- Works for Purchase, Rate and Term Refinance and Cash out with cash out amounts up to $500k
- Revocable Trusts OK
- Reserves – as little as 3 months PITI
- Gifts are allowed – conditions and restrictions are lender and program specific
- Many allow rent of the departing residence with up to 75% gross rents.
- Recently listed properties are allowed with some investors
- Delayed Financing is allowed for the original purchase price
- 1031 Exchanges are available with some investors
- Newly retired income OK after receipt of one month of income and proof of 3 years continuance
- Asset depletion is available on some programs
- Exclude co-signed debts
- Some allow ADU income
- Acreage up to 10 acres
- Higher loan amounts may require 2 appraisals
What happens if you need to borrow more than $3 Million? Well, that is what is called a Super Jumbo – in
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