The jumbo loan is the conventional product for higher-price-point homes. While conforming conventional loans are sold to Fannie Mae or Freddie Mac, jumbo loans are sold to private investors, pension funds, insurance companies, or held on the lender’s balance sheet.
Jumbo loan parameters
- Loan amount — above conforming limits ($806K-$1.2M+ depending on county)
- Down payment — typically 10-20% minimum; 20%+ for best pricing
- Credit score — 700+ typically; 740+ for best rates
- DTI cap — 43% back-end typical; some programs allow 50% with compensating factors
- Reserves — 6-12 months of housing reserves required
- Documentation — full income documentation; non-QM jumbo variants exist for self-employed or asset-rich borrowers
Jumbo pricing
Historically jumbo rates priced above conforming, but the gap has narrowed significantly. In recent years jumbo rates have sometimes been at or below conforming rates due to investor demand for higher-balance product. Current pricing varies by lender and program.
Marketing jumbo loans
Jumbo borrowers tend to be higher-income, more financially sophisticated, and more rate-sensitive than conventional borrowers. They shop more aggressively and are less likely to convert on first contact. Jumbo nurture sequences benefit from longer education cycles and emphasis on rate transparency.
