💎 What Is a Jumbo Loan?
A jumbo loan (also called a non-conforming loan) is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac. These government-sponsored enterprises (GSEs) buy and guarantee most mortgages in the U.S., but they can only purchase loans up to certain limits.
When you need to borrow more than the conforming limit, you need a jumbo loan. These loans are called "jumbo" because they're larger than standard mortgages and carry more risk for lenders since they can't be sold to Fannie Mae or Freddie Mac.
📊 2026 Jumbo Loan Thresholds:
Standard Areas (75% of US counties):
• Conforming limit: $806,500
• Jumbo threshold: $806,501+
High-Cost Areas (CA, NY, WA, CO, etc.):
• Conforming limit: $1,209,750
• Jumbo threshold: $1,209,751+
🔑 Key Jumbo Loan Characteristics:
- ✅ Higher loan amounts - $806K to $10M+ (some lenders go to $20M)
- ✅ Stricter requirements - 700+ credit, 10-20% down, extensive documentation
- ✅ Higher rates - 0.25-1% more than conforming loans
- ✅ More cash reserves - 6-12 months PITI payments in bank
- ✅ Lower DTI limits - 43% max (36% preferred)
- ✅ No government backing - Lenders hold all risk (can't sell to Fannie/Freddie)
- ✅ Portfolio loans - Many lenders keep jumbo loans in-house
🚀 Ready to Get Pre-Approved for Jumbo Loan?
Compare jumbo lenders and get pre-approved in 10 minutes. See how much you can afford for luxury homes.
Compare Jumbo Lenders →📋 Jumbo Loan Requirements 2026 (Complete Checklist)
Jumbo loans have stricter requirements than conforming loans because lenders can't sell them to Fannie Mae or Freddie Mac. Here's what you need:
1. Credit Score Requirements
| Credit Score | Rate Impact | Approval Odds |
|---|---|---|
| 700-719 | +0.75-1% higher rate | Difficult (few lenders) |
| 720-739 | +0.5% higher rate | Good |
| 740-759 | +0.25% higher rate | Excellent |
| 760-779 | Standard rate | Best rates |
| 780+ | Lowest rate | Premium pricing |
💡 Pro Tip:
Every 20 points of credit score can save 0.25% on rate. On a $1M loan, that's $1,500/year or $45,000 over 30 years.
2. Down Payment Requirements
Minimum down payment: 10-20% depending on loan amount and lender
Down Payment by Loan Amount:
- • $806,500-$1M: 10-15% down ($80,650-$150,000)
- • $1M-$1.5M: 15-20% down ($150K-$300K)
- • $1.5M-$2M: 20% down ($300K-$400K)
- • $2M+: 20-30% down ($400K+)
💰 Why Larger Down Payments Matter:
- Lower monthly payments
- Better interest rates (0.25-0.5% lower)
- Easier approval (lower risk for lender)
- No PMI required (jumbo loans rarely have PMI)
3. Debt-to-Income Ratio (DTI)
Maximum DTI: 43% (36% preferred for best approval odds and rates)
DTI Calculation Example ($1M Loan):
Scenario:
- • Gross monthly income: $25,000 ($300K/year)
- • Car payment: $800
- • Student loans: $500
- • Credit cards: $300
- • New mortgage payment: $6,500 (PITI)
- • Total monthly debts: $8,100
- • DTI: $8,100 ÷ $25,000 = 32.4% ✅ EXCELLENT
🎯 DTI Sweet Spots:
- • Under 36%: Best rates, easiest approval
- • 36-43%: Standard approval, slightly higher rates
- • Over 43%: Difficult approval, compensating factors needed
4. Cash Reserves Requirements
Lenders require 6-12 months of PITI payments in liquid assets AFTER closing
Cash Reserves Examples:
- • $1M loan ($6,500/month PITI) = $39K-$78K reserves
- • $1.5M loan ($9,750/month PITI) = $58.5K-$117K reserves
- • $2M loan ($13,000/month PITI) = $78K-$156K reserves
💼 What Counts as Reserves:
- Checking/savings accounts
- Money market accounts
- Stocks, bonds, mutual funds (70% of value)
- Retirement accounts (60% of vested balance)
- NOT: Equity in other properties, pending bonuses
5. Income Documentation
Jumbo loans require extensive income verification:
📄 Required Documents:
- W-2 Employees:
- 2 years W-2s
- 2 years tax returns (with all schedules)
- 2 months recent pay stubs
- Employment verification letter
- Self-Employed:
- 2 years personal tax returns
- 2 years business tax returns
- Year-to-date profit & loss statement
- Business bank statements (3-12 months)
- CPA letter verifying income
💰 Jumbo Loan Rates 2026
Jumbo loan rates are typically 0.25-1% higher than conforming loan rates due to increased lender risk.
| Loan Type | Rate Range (Jan 2026) | vs Conforming |
|---|---|---|
| 30-Year Fixed Jumbo | 6.5-7.5% | +0.44-1.44% |
| 15-Year Fixed Jumbo | 6.0-6.75% | +0.25-1% |
| 7/1 ARM Jumbo | 5.75-6.5% | +0.25-0.75% |
| 10/1 ARM Jumbo | 6.0-6.75% | +0.25-0.75% |
| Conforming 30-Year | 6.06% | Baseline |
📊 What Affects Your Jumbo Rate:
- Credit Score: 700 vs 780 = 0.75% rate difference
- Down Payment: 10% vs 20% = 0.25-0.5% difference
- Loan Amount: $900K vs $2M = 0.25% difference
- DTI Ratio: 36% vs 43% = 0.25% difference
- Cash Reserves: 6 months vs 12 months = 0.125% difference
- Property Type: Primary residence vs investment = 0.5-1% difference
- Lender: Shop 3-5 lenders for 0.25-0.5% savings
🚀 Compare Jumbo Loan Rates
Get personalized jumbo loan quotes from top lenders. Compare rates and save thousands.
Compare Jumbo Rates →🏦 Best Jumbo Loan Lenders 2026
Not all lenders offer jumbo loans. Here are the top jumbo loan lenders in 2026:
1. Chase Bank
- • Loan amounts: Up to $3M
- • Down payment: 10-20%
- • Credit score: 700+
- • Best for: Relationship banking discounts
2. Wells Fargo
- • Loan amounts: Up to $5M
- • Down payment: 10-25%
- • Credit score: 700+
- • Best for: High loan amounts
3. Bank of America
- • Loan amounts: Up to $3.5M
- • Down payment: 10-20%
- • Credit score: 720+
- • Best for: Preferred Rewards members
❓ Frequently Asked Questions
Do jumbo loans have PMI?
NO. Jumbo loans typically do NOT require private mortgage insurance (PMI), even with less than 20% down. However, you'll pay a higher interest rate instead (0.25-0.5% more with 10-15% down vs 20% down).
Can I get a jumbo loan with 10% down?
YES, but it's harder. Most lenders prefer 20% down for jumbo loans. With 10-15% down, expect: Higher interest rates (+0.25-0.5%), stricter credit requirements (740+ score), more cash reserves (12 months), lower DTI limits (36% max).
Are jumbo loan rates higher than conventional?
YES, typically 0.25-1% higher. January 2026: Jumbo 6.5-7.5% vs Conventional 6.06%. However, for highly qualified borrowers (780+ credit, 20%+ down, 36% DTI), jumbo rates can be EQUAL to or even LOWER than conventional rates.
Can self-employed borrowers get jumbo loans?
YES! Self-employed borrowers qualify with: 2 years tax returns (personal + business), Year-to-date P&L statement, 3-12 months business bank statements, CPA letter, Consistent or increasing income trend. Expect stricter scrutiny and potentially higher rates.
What is the maximum jumbo loan amount?
Varies by lender: Most banks: $3-5M, Private banks: $10-20M, Portfolio lenders: $20M+. Loans over $2M typically require: 20-30% down, 760+ credit score, 36% max DTI, 12+ months reserves, Multiple appraisals.
Ready to Get Pre-Approved for Jumbo Loan?
Compare jumbo lenders and get pre-approved in 10 minutes. See how much you can afford for luxury homes.
Get Pre-Approved Now →