Jumbo Loans
Fannie Mae and Freddie Mac both have limits on the value of homes that these associations protect. Homebuyers who can afford to take out a loan on homes with a value higher than the conforming loan limits can utilize jumbo loans to make their purchase.
Benefits of a jumbo loan
The only benefit of a jumbo loan is that it allows you to purchase a home that exceeds the mortgage limit of the region where that home is located in the United States.
If a borrower needs to borrow more than that mortgage limit, then their only option is to apply for a jumbo loan, which is not backed by the Federal Housing Finance Agency.
Who qualifies for a jumbo loan?
Because there is no federal backing for jumbo loans, there is a much more comprehensive set of requirements for a borrower to get one. Here are the criteria that most lenders require for a borrower to qualify for a jumbo loan:
• A borrower must have a credit score of at least 700.
• A borrower must have a debt-to-income ratio of at least 43% or less (usually less).
• Income requirements depend on the total value of the home being purchased, but only high-income individuals are usually considered for jumbo loans.
United States loan limits
The United States has over 3,000 counties or county-equivalent jurisdictions. In any given year, roughly 100 to 200 of them qualify for high-cost limit values that exceed the baseline limit value.
• The vast majority of United States counties have a loan limit of $766,550 as of 2024.
• In the more expensive CA, DC, MD and VA -area counties, for example, the single-family loan limit has increased to $1,149,825 for 2024.
• States and territories that are not a part of the continental United States, such as Hawaii, Guam, and Alaska, (among others) have a maximum loan limit of up to $766,550. For high-cost areas, and also for Alaska, Guam, Hawaii and the U.S. Virgin Islands, the loan limit for a one-unit home increased to $1,149,825 for 2024.
Call our experts today to see if you qualify for a Jumbo loan!
