Updated: January 1, 2024
Understanding the financial landscape of mortgages can be complex, especially when it comes to the realm of “jumbo vs. super jumbo mortgage.” These two mortgage types, although similar in some aspects, carry distinct differences that potential borrowers must be aware of.
If you’re purchasing a new property or refinancing an existing one and need an extra-large loan amount, understanding the differences between these two loans is vital.
This guide provides an in-depth comparison of both loan types, equipping you with the knowledge to make the right decision for your specific financial situation.
What is the difference between a jumbo loan and a super jumbo loan?
The main difference between a super jumbo loan and a jumbo loan is the loan amount. A “jumbo” loan amount is at least $766,551. (In 2024, the conforming limit in most counties is $766,550 for single-family residences.) A “super jumbo” loan starts much higher, typically $3 million.
To illustrate further, jumbo loans exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). That’s why they’re referred to as “nonconforming” loans. This means that these loans cannot be bought or guaranteed by Fannie Mae or Freddie Mac.
Super jumbo loans are also nonconforming loans that Fannie and Freddie won’t buy. But they are even larger loans. They don’t just exceed the FHFA’s conforming limits. They far exceed the limits.
While jumbo loans start at $766,551 in most scenarios, super jumbo loans typically start 4 times that amount, at $3 million.
Jumbo vs super jumbo mortgage comparison chart
The following table offers a clear comparison between jumbo and super jumbo mortgages across five critical parameters:
- Loan amount (broken down by property type and whether the property is located in a regular- or high-home-price area)
- Rates
- Requirements
- Type of underwriting
- Availability
| Jumbo | Super Jumbo | |
| Loan Amount (SFR, condo) | $766,551 and up $1,149,826 and up (high-home-price areas) | $3M – $30M |
| Loan Amount (2-unit) | $981,501 and up $1,472,251 and up (high-home-price areas) | $3M – $30M |
| Loan Amount (3-unit) | $1,186,351 and up $1,779,526 and up (high-home-price areas) | $3M – $30M |
| Loan Amount (4-unit) | $1,474,401 and up $2,211,601 and up (high-home-price areas) | $3M – $30M |
| Rates | Varies | Typically higher |
| Requirements | Good credit, low DTI, significant down payment | Excellent credit, very Low DTI, large down payment |
| Type of Underwriting | Manual; stringent | Manual; even more stringent and highly specialized |
| Availability | Several lenders offer | Very few lenders offer, very niche area |
Not sure if you need a jumbo loan vs. a super jumbo loan?
Let’s dive into each of the 5 parameters in more detail.
Jumbo vs super jumbo mortgage loan amounts
Jumbo loans come into play when the loan amount exceeds the conforming loan limit set by the FHFA by one dollar. In 2024, the loan limit for a jumbo loan is $766,550 for a single-family residence or condominium unit, so a loan amount of $766,551 is considered jumbo.
However, be aware that in high-home-price areas, the FHFA sets higher limits. In 2024, the loan limit for a single-family residence or condo can be as high as $1,149,825, for example, the entire states of Alaska and Hawaii, and certain counties in California, Utah, Wyoming, Idaho, Maryland, Virginia, New York, New Jersey, Pennsylvania, and Massachusetts.
Super jumbo loans, on the other hand, cater to borrowers who require loan amounts that substantially exceed these limits, often entering into several millions of dollars.
The limit for a super jumbo loan is not standardized by the FHFA.
Instead, super jumbo loan amounts vary based on the lender’s discretion. They usually exceed $3 million and can be as high as $30 million (or more). These types of loans are therefore tailored for financing ultra-luxury properties in highly competitive real estate markets.
Super jumbo vs jumbo mortgage rates
Interest rates are an essential aspect to consider when choosing between a jumbo and a super jumbo loan.
When it comes to rates, jumbo loans typically have slightly higher interest rates than conforming loans due to the larger amount of money being borrowed. This is due to the increased risk to the lender.
In the case of super jumbo loans, the rates can be even higher. This is a reflection of the considerably larger loan amounts and the greater risk that the lender assumes.
While your interest rate will greatly depend on your exact situation, you can read about a recent super jumbo mortgage we obtained for our client in California to get a general sense of what rates to expect.
Requirements: jumbo vs. super jumbo
Both jumbo and super jumbo loans require borrowers to have good to excellent credit scores, low debt-to-income ratios, and substantial down payments.
However, the requirements for super jumbo loans are even more stringent.
For super jumbo loans, lenders often require an excellent credit score, an extremely low debt-to-income ratio, and a larger down payment. This is due to the increased risk associated with such large loan amounts.
Furthermore, compared to jumbo loans, super jumbo lenders may require proof of significantly more cash reserves to ensure that the borrower can handle the large monthly payments.
Underwriting type: jumbo vs. super jumbo
Compared to conforming loans, both jumbo and super jumbo loans undergo rigorous, manual underwriting processes.
For jumbo loans, lenders conduct thorough assessments of the borrower’s financial position, including credit score, income, assets, and debt.
Super jumbo loans, due to their size and risk, are subject to even more stringent underwriting requirements. Lenders scrutinize the borrower’s financial stability, liquidity, and overall financial picture to ensure repayment capability.
Availability comparison: jumbo vs. super jumbo loans
The availability of jumbo and super jumbo loans differs significantly in the marketplace.
Jumbo loans are relatively common as they are offered by a variety of financial institutions, including banks and credit unions. This is because, although these loans exceed conforming loan limits and thus involve more risk, they are still within a range that many lenders are comfortable managing.
On the other hand, super jumbo loans are less commonly found. They represent a very niche area in the lending market. The substantially higher loan amounts associated with super jumbo mortgages represent a greater risk to lenders, which could lead to substantial financial loss in the event of a borrower default. As such, fewer lenders are willing to assume this risk.
Thus, finding a lender that offers super jumbo loans can be a more challenging task for borrowers.
This underscores the importance of working with a knowledgeable and well-connected mortgage broker, who can guide you through the lending landscape and connect you with the appropriate lenders for your specific needs.
How DAK Mortgage can help with your jumbo decision
At DAK Mortgage, we have the experience and network necessary to find the best super jumbo mortgage lenders.
Not only can we help find the needle in the haystack, but we also have creative loan programs.
While jumbo and super jumbo loans are generally associated with stringent guidelines due to their inherent risk, our lenders are willing to step outside the conventional frameworks and offer more flexible criteria such as:
- Self-employed: One such program caters specifically to self-employed borrowers, for whom providing traditional proof of income through tax returns can be a challenge. Our lenders are able to offer jumbo and super jumbo loans without requiring tax returns, a considerable relief for many self-employed individuals.
- 2x liquidity: In other instances, we can tap into programs that offer exemptions from the traditional income verification process if the borrower holds twice the loan amount in liquid assets. This 2x liquidity program is particularly suited for individuals with significant cash reserves, but fluctuating income.
- High leverage: Furthermore, we work with lenders who offer the best of both worlds: high loan amounts coupled with high loan-to-value ratios (LTV). For example, whereas some super jumbo lenders only go up to $3M at 80% LTV, our lenders surpass that with up to $7.5M at 80% LTV.
- Cross-collateralization: This unique program enables borrowers who hold equity in other real estate properties to leverage that equity as security for the jumbo or super jumbo loan. This option can be utilized for both fresh property purchases and refinancing existing ones. With adequate collateral and demonstrated proof of reserves, borrowers can attain up to 100% LTV.
- Pledged assets: This allows borrowers to utilize assets like cash, certificate of deposits, savings accounts, or even stocks and bonds as collateral to secure their jumbo or super jumbo loan.
- Asset depletion: This is a useful strategy for borrowers with substantial assets but lower documented income. Lenders compute the time period over which a borrower’s assets could produce sufficient income to handle the mortgage and associated costs.
In the complex world of “jumbo vs. super jumbo” mortgages, DAK Mortgage is your ally, helping you navigate the intricacies and nuances, and finding the best fit for your needs. Read more about bespoke high-net-worth mortgage options for high-net-worth individuals.
We know jumbo and super jumbo. Let us navigate you through the differences.
Which is better for me? A jumbo or super jumbo mortgage?
Whether a super jumbo or jumbo mortgage is the right choice for you depends on several factors, including the property price, your financial situation, and your long-term plans.
If you’re eyeing a high-end property that far exceeds the conforming loan limits but falls short of the super-luxury bracket, a jumbo loan may be the right choice.
On the flip side, if you’re considering purchasing or refinancing a property in the multi-million dollar range in a high-cost area, a super jumbo loan may be your best bet.
In both scenarios, it’s crucial to take a comprehensive look at your finances, understand the requirements and rates of each loan type, and work with an experienced mortgage broker like DAK Mortgage. Making an informed decision about your mortgage loan will set you up for financial success in the long run.
Whether you’re seeking a jumbo loan in Florida, or a super jumbo loan in California, we’re here to help.
