Jumbo Loans

JUMBO LOANS:

Fannie Mae and Freddie Mac are restricted by law to purchasing single-family mortgages with origination balances below a specific amount, known as the “conforming loan limit.” Loans above this limit are known as jumbo loans.

The national conforming loan limit for mortgages that finance single unit properties is $417,000. Any loan amount above this limit is considered a "jumbo" loan.  However, there are 4 designated high cost areas that have been statutorily designated high cost areas: Alaska, Hawaii, Guam and the U.S. Virgin Islands. 

As stated in the Federal Housing Finance Agency on line manual:  Since 2008, various legislative acts increased the loan limits in certain high-cost areas in the United States.  While some of the legislative initiatives established temporary limits for loans originated in select time periods, a permanent formula was established under the Housing and Economic Recovery Act of 2008 (HERA).  Loan limits determined under the HERA formula will apply to loans: (a) acquired by Fannie Mae and Freddie Mac in 2013 and (b) originated after September 30, 2011 or before July 1, 2007.

Please click here to see a summary of those areas designated as high cost. You will see that King, Pierce, Snohomish counties in Washington state has a loan limit of $506,000 and San Juan a loan limit of $483,000.  The maximum high balance conforming loan amount for a 1 unit residence is $625,500 except for those 4 designated high cost areas mentioned above. 
 

High Balance Conforming Loans: Home Loans provided in the range of $1 above the national conforming limit of $417,000 to the loan limits in high cost areas are generally referred to as Conforming, "High Balance" Loans and are not considered a true Jumbo product. High balance conforming loan interest rates are slightly higher than conforming home loan interest rates and lower than Jumbo loan interest rates. Eligible property types for high balance conforming are 1 to 4 unit properties.  Fixed and adjustable rate loan programs are available for high balance conforming loans.  

Jumbo Loan Amounts: The minimum loan amount must exceed the current High Balance loan amounts established by the Federal Housing Finance Agency(FHFA) and cannot exceed $2,000,000. I have provided the link here that once again provides you with the national summary of what the high balance loan limits are and where the Jumbo Loan amounts begin.

Jumbo Loan Products Available:  Programs change periodically, but generally you will always be able to get a Jumbo 30 year fixed , 5/1 or 7/1 ARM.  I recommend we discuss your situation if you are not sure which program might be best for you.  

Credit Requirements: Borrowers who need a Jumbo Home Purchase/Refinance loan should have a mid FICO score of 700 or above. Need to check your credit?  Please call me and we can have it verified in minutes. Credit improvement is a process we can start immediately.  

Eligible Properties: Principal Residence, 2nd Home(owner occupied) and a 2 unit property, PUD/Townhouse 

 Loan Purpose: General rules are that you can use a jumbo loan for a owner occupied purchase/2nd Home, rate and term refinance/Limited Cash Out. 

  • ​​Proceeds can be used to pay off a first mortgage regardless of age
  • Proceeds can be used to pay off any junior liens related to the purchase of subject property
  • Proceeds can be used to pay off a 12 month seasoned junior lien that has no draws greater than $2k within the last 12 months. However, please check back with me on this one as we are updated with new programs giving our borrowers greater flexibility 
  • Pay related closing costs and prepaid items
  • Disburse cash out to the Borrower in an amount not to exceed $2,000

 Loan to Value(LTV) Requirements: Generally, you will need at least a 20% deposit or greater for a Jumbo purchase, depending on credit. Once again, please call me so we can go over the variables.  

Eligible Borrowers:  

  • U.S. Citizen
  • Permanent Resident Alens with proof of lawful permanent residence, green card, and a permanent right to work in the U.S.
  • Non-Permanent Resident Aliens must have
  1. ​A valid Social Security Number
  2. An enexpired and valid acceptable VISA
  3. Proof of lawful residency
  4. Work Auhorization…3 years left or more and min 2 year work history