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Jumbo Loan Limits in 2020

Despite the name, jumbo loan limits do have their limits. Find your jumbo loan options and purchasing power with our guide.

A conventional home loan, also called a conforming mortgage, is a popular mortgage loan for buying a single-family home, condo, townhouse, and other types of properties. But if you’re looking to purchase a luxury property with a higher price tag, you’ll likely need a jumbo mortgage. This mortgage helps finance properties that exceed the conforming loan limit set by the Federal Housing Finance Agency.


What is a Jumbo Mortgage?

A jumbo loan is a mortgage solution for borrowers buying properties with loan amounts priced higher than the conforming loan limit for their county or state. Jumbo loans are also known as non-conforming loans. They aren’t backed or sold by Fannie Mae or Freddie Mac. These are government-sponsored enterprises that buy loans from mortgage lenders. The Federal Housing Finance Agency (FHFA) limits the loan size for mortgages sold by both enterprises.

Jumbo loans vary. They can feature either a fixed-rate or an adjustable-rate. There's also the option of a jumbo FHA loan or a jumbo VA loan.

Limits for Jumbo Loans

Jumbo loans can be used to finance new homes with purchase prices well into the millions. Conforming loans have maximum loan amounts. Yet, there aren’t any industry established loan limits for jumbo or non-conforming loans. But while such limits don’t exist on a national level, some individual lenders might limit their jumbo loans to $1 million or $2 million.

How Jumbo Loans Works

Because jumbo loans are not backed by Fannie Mae or Freddie Mac, they are a riskier product for mortgage lenders. Therefore, these loans typically have stricter approval guidelines compared to conforming loans. To help reduce lender risk, jumbo loans often require home buyers to put down a higher down payment.


Loan Limits by State

The conforming loan limit for 2020 in most areas in the United States is $510,400. This is an increase from the 2019 conforming loan limit of $484,350. This limit, however, is greater in high-cost areas and competitive real estate markets. These high-cost markets include Hawaii, Alaska, Guam, New York, the U.S. Virgin Islands and Los Angeles County. In these markets, the maximum conforming loan limit for 2020 is $765,600. Click here for the most recent information on loan limits by state.

Is Qualifying for a Jumbo Mortgage Different?

Jumbo loans have stricter approval guidelines compared to a conventional loan. This is because they are larger loans. Getting a jumbo loan will require a good credit history and a higher credit score. You'll also need a larger down payment and a lower debt-to-income ratio. Your jumbo loan rate is based on your credit and the amount of your down payment.

Applying for a Jumbo Loan

Speak with one of our experienced loan experts to apply for a jumbo loan. Keep in mind that while these loans tend to have stricter requirements and require more out-of-pocket cash, jumbo mortgage rates are often comparable to rates on conforming mortgages.

Find A Jumbo Loan Expert