Jumbo loans
For loan amounts above the conforming limit. More documentation, a closer look at reserves, and a lender who's done enough of them to know where the surprises hide.
Who it's for
Buyers in the higher price ranges of the DC metro and other expensive markets, where even a healthy down payment leaves the loan above the conforming limit. That includes plenty of two-income professional households, physicians, and business owners.
How it works
Once a loan exceeds the conforming limit, Fannie Mae and Freddie Mac won't buy it, so the lender holds it or sells it to private investors. That means the lender's own guidelines apply, and they're stricter: more reserves after closing, tighter debt-to-income ratios, and a full look at every income source.
My jumbo program requires a minimum of 15% down. Pricing is competitive with conforming loans and sometimes better, because the borrowers tend to be strong.
What to know
Reserves matter more than you think. Most jumbo programs want to see several months of total housing payment in the bank after closing, in addition to the down payment and closing costs. Retirement accounts often count, at a discount. We'll map this out early.
Appraisals get more scrutiny. On higher-value homes, a second appraisal or a desk review is common. Build a few extra days into the timeline.
A conventional loan might still work. In the DC area the conforming limit is high, and I've had more than one buyer assume they needed a jumbo when a slightly larger down payment put them into a conforming loan with easier terms. We check both.
Related
If you're a physician, the doctor loan programs I offer reach into jumbo ranges with lower down payments. If you're self-employed with complex income, jumbo and Non-QM sometimes overlap.
Around Washington, DC
Jumbo starts at $1,249,126 here, not at the national $832,750, because the DC metro counts as a high-cost area. A $1.1 million house in Bethesda, Arlington or Capitol Hill is a conventional loan with conventional pricing. Jumbo becomes the conversation in Potomac, Chevy Chase, McLean, Great Falls, and the larger Capitol Hill and Georgetown homes, and for two-to-four unit properties the thresholds go higher still.
If you're near the line, the structure matters: a slightly larger down payment, or a first mortgage at the conforming limit with a second lien behind it, can keep you in conforming pricing. I run both before I quote.
Want to talk it through?
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