Jumbo loans refer to loan amounts that are greater than your county's conforming or high balance loan limits. These limits are set by the Federal Housing Finance Agency (FHFA) and used by GSEs Fannie Mae and Freddie Mac.

Jumbo loans are especially common in high-cost areas around the country, where the median home prices could easily exceed the loan limits.

Since Jumbo loans are purchased by private investors, rather than Fannie Mae and Freddie Mac, qualifying criteria and guidelines are generally much more strict — including larger down payment expectations, higher FICO® scores, and increased reserve requirements.

Jumbo loans are often more complex than other loan types, with more strict qualifying criteria, additional investor input in the loan process, and the increased risk perception that goes with larger loan amounts.

• Higher FICO® credit score requirements — typically 700+, where conventional loans may allow 620+ and FHA loans may allow 580+.
• Higher equity requirements and a lower loan-to-value percentage.
• Higher reserve requirement for additional assets.

Generally, the stronger your financial profile, the more competitive your Jumbo loan options will be.

Jumbo loans allow you to purchase most types of residential real estate, including single-family homes, condominiums and townhomes, and 2-to-4 unit properties. These can be primary homes, second homes, or even investment properties. 

Jumbo loans typically require sizeable down payments for the most competitive options — 20%-to-25% for primary homes and as much as 35%-to-40% for investment properties.

Yes, VA Jumbo loans are available. You will be expected to meet all of the VA standards when it comes to the property and appraisal, in addition to the income, asset, and credit qualifications. 

While it is possible to get a VA Jumbo loan without a down payment, there may be additional requirements when it comes to your FICO® credit scores.

Learn more about VA Loans here.