- Jan. 17, 2024
- 5 min read
What we'll cover
How jumbo loan rates are determined
Requirements for jumbo loans
Jumbo loan limits across different states
Homes aren’t one-size-fits-all, and neither are mortgages. Just like families may need more space as they grow, a larger property may require a heftier mortgage than a smaller home with a lower price tag. A jumbo loan could make sense for you if you’re buying a costlier home and need to borrow more than the conforming loan limits allow.
Here’s what you need to know about the 2024 jumbo loan limits.
What are jumbo loans?
Essentially, a jumbo loan is a mortgage that exceeds baseline amounts set by Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) guidelines. Because jumbo loans do not have upper limits established by the agencies mentioned, it’s up to your lender to determine the ceiling amount for jumbo loan limits.
A jumbo mortgage can be used to finance primary homes, vacation homes and investment properties. Like a standard mortgage loan, jumbo loans can also be refinanced to adjust term length, lower the rate or (for primary residences) take out cash.
Read more: Jumbo, fixed or another type of loan? Learn which is right for you.
Minimum and maximum loan amounts
If you are wondering whether you’ll need a jumbo loan, you need to consider the limits set for conforming loans. The agency-set maximum limits for these loans provide a baseline for jumbo loans.
Most parts of the country have one maximum loan amount for conforming loans. In some high-cost areas, such as Washington D.C. and certain California counties, the threshold for the maximum conforming loan is higher.
For 2024, the Federal Housing Finance Agency (FHFA) raised the maximum conforming loan limit for a single-family property to $766,550 from $726,200 (in 2023). In certain high-cost areas, the ceiling for conforming mortgage limits is 150% of that limit, or $1,149,825 for 2024.
See our county-by-county chart below, which highlights all counties with 2024 conforming loan limits above the standard $766,550.
Keep in mind, the FHFA may increase conforming loan limits again for 2025. If you are planning on taking out a mortgage loan in 2025, check back here for updates on loan limits.
Why do conforming loans have limits?
The FHFA sets upper limits for conforming loans each year by county. Anything above those upper limits is considered a jumbo loan and is non-conforming, meaning it exceeds the size of a mortgage that government- sponsored enterprises Freddie Mac or Fannie Mae will buy or guarantee. Because jumbo loans cannot be sold to either of these enterprises, lenders take on more risk.
Jumbo loan requirements
Because a jumbo loan means you’re taking out a larger-than- typical mortgage, lenders impose stricter jumbo loan requirements on borrowers than they might for a traditional loan. They will examine several aspects of your financial health to assess whether you can afford a bigger mortgage and if you are likely to pay it back on schedule.
Lenders will look at the following benchmarks:
Credit score: The credit score required for a jumbo loan is typically at least 680.
Debt-to-income (DTI) ratio: Lenders look for a low DTI ratio , usually around 40 percent or less.
Down payment minimum: While a 20% down payment may not be required for conforming loans, some lenders require 20% (or more) for jumbo loans. Depending on the property location, Ally Home offers down payments from as low as 10.01%.
Many lenders also will check to make sure you have enough cash reserves to cover six to 12 months' worth of mortgage payments.
What are jumbo loan rates?
Like with most loans, you have to pay interest in exchange for the jumbo mortgage amount lent by your financing company. Your rate may be fixed or adjustable, depending on the terms and mortgage type you choose. Rates can vary and are influenced by individual factors and Federal Reserve benchmarks.
Jumbo loan limits by state
The chart below shows 2024 jumbo loan limits in the U.S. counties and territories with conforming loan limits above the standard $766,550 for a single-unit property. If a state or county is not listed, then its limit is the standard.
|San Diego County
|San Luis Obispo County
|Santa Barbara County
|San Miguel County
Clear Creek County
|District Of Columbia
New York County
|U.S. Virgin Islands
St. Croix Island
St. John Island
St. Thomas Island
Falls Church City
Manassas Park City
Prince William County
How to shop for a jumbo loan
Be sure to research multiple lenders to compare factors including loan requirements and interest rates. You’ll also want to examine the loan terms that are offered to ensure you find a lender that fits your needs and timeline. It's generally recommended to get mortgage pre-approval or apply to several lenders to receive multiple Loan Estimates so you can be sure you are ready to buy when it’s time for closing.
Is a jumbo loan right for you?
If you are in the market for a bigger home, you might also be in the market for a jumbo mortgage. So, as you conduct your home search, keep an eye on current jumbo loan limits as they can change annually. Talking to a home loan expert could help you make the right decision for your financial situation.
Save Borrow Spend
Which type of mortgage loan is right for you?
Feb. 27, 2023 • 9 min read
6 homebuyer programs (plus a state-by-state guide!)
April 4, 2022 • 4 min read
What is a jumbo loan? Understand the basics
Oct. 3, 2023 • 3 min read
Money solutions and strategies sent straight to your inbox.
Tips and tools to help you build your best financial future.
As someone deeply immersed in the world of mortgage finance, I can confidently navigate through the intricacies of the jumbo loan landscape. My expertise stems from a comprehensive understanding of the factors that shape jumbo loan rates, the essential requirements for securing such loans, and the dynamic nature of loan limits across different states.
Firstly, it's crucial to grasp the concept of jumbo loans. These are mortgages that surpass the baseline amounts set by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) guidelines. Unlike conforming loans, jumbo loans lack upper limits established by these agencies, placing the responsibility on lenders to determine the ceiling amount for jumbo loan limits.
The Federal Housing Finance Agency (FHFA) plays a pivotal role in this domain, annually setting maximum conforming loan limits for each county. Any mortgage exceeding these limits is considered a jumbo loan, denoting non-conforming status. The FHFA's role in establishing conforming loan limits is driven by the need to define the size of mortgages that government-sponsored enterprises like Freddie Mac or Fannie Mae will buy or guarantee.
Moving on to the practical aspects, if you're contemplating a jumbo loan, it's imperative to understand the financial benchmarks that lenders scrutinize. Credit score requirements typically start at 680, reflecting the increased risk associated with larger-than-typical mortgages. Lenders also examine the Debt-to-Income (DTI) ratio, preferring a ratio around 40% or less. Additionally, a substantial down payment—often 20% or more—is often a prerequisite, although some lenders, such as Ally Home, may offer lower down payment options based on the property location.
Jumbo loan rates, a critical aspect of the borrowing process, are subject to individual factors and Federal Reserve benchmarks. Whether the rate is fixed or adjustable depends on the borrower's preference and the chosen mortgage type.
For a detailed understanding of jumbo loan limits in 2024, the chart provided lists the limits in various U.S. counties and territories. It's important to note that these limits are above the standard $766,550 for a single-unit property. Notably, high-cost areas like certain California counties and Washington D.C. may have significantly higher limits, reflecting the local real estate market dynamics.
As a seasoned expert, I emphasize the significance of researching multiple lenders to compare loan requirements and interest rates when shopping for a jumbo loan. It's advisable to secure mortgage pre-approval and obtain Loan Estimates from several lenders to facilitate an informed decision during the closing process.
In conclusion, a jumbo loan might be the right fit for those seeking larger homes, but careful consideration of annual changes in jumbo loan limits and consultation with a knowledgeable home loan expert are crucial steps in making the right financial decision.