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Residential Loans: Jumbo Loans

What is a jumbo loan?

  • A jumbo loan is a type of mortgage that exceeds the limits set by the Federal Housing Finance Agency, and is therefore not eligible to be purchased or backed by Fannie Mae or Freddie Mac.
  • Hence, jumbo loans are also referred to as “non-conforming” loans.
  • They are typically used for purchasing or refinancing luxury homes in highly competitive real estate markets.
  • Because there is more money involved, and because these loans are not backed by Fannie Mae or Freddie Mac, jumbo loans carry more risk for lenders.
  • In turn, lenders typically impose stricter requirements on borrowers for jumbo loans.

Sample jumbo loan programs

The key determinative factor as to whether a loan is jumbo is the loan amount. If the loan amount exceeds the following limits by $1, then it is considered jumbo:

  • 1-unit property: $484,350
  • 2-unit property: $620,200
  • 3-unit property: $749,650
  • 4-unit property: $931,600

Those are the current limits for nearly all counties in Florida (except Monroe County, where the limits are $529,000, $677,200, $818,600, and $1,017,300 for 1-, 2-, 3- and 4-unit properties, respectively.)

Once those thresholds are reached, lenders have many different jumbo loan programs, which may include the following options:

  • “Super jumbo” loans (which typically exceed $1 million): As just one example, some lenders offer a jumbo purchase loan up to $5 million (maximum loan-to-value ratio (LTV) of 65% and minimum credit score of 680), or a jumbo cash-out refinance up to $4 million cash out (maximum LTV of 50% and minimum credit score of 700).
  • Creative ways to show income: Many lenders allow borrowers to provide bank statements instead of tax returns, and/or utilize assets to show income (e.g., checking accounts, savings accounts, mutual funds, retirement assets), and/or consider less traditional sources of income (e.g., cryptocurrency/bitcoin and short-term rental income (including Airbnb income)).

All items are subject to change. Call David A. Krebs at 321-239-2781, click here to submit a message, or click here to book a call.

Sample success stories

Learn how we’ve helped families and individuals obtain jumbo loans in Florida. Go to our “Success Stories” page and filter by “Residential Jumbo Financing”.