Jumbo Loans are loans that exceed the conforming loan limits, and are not eligible to be purchased, securitized, or guaranteed by Fannie Mae or Freddie Mac.
As of 2023 a JUMBO is a loan of $ or more in most areas. In high-cost areas the starting loan limit for a 1 unit property is $1,089,300 (varies depending on the County). If you're interested in finding out if your potential home is in a high cost ares, you can look at this Fannie Mae Loan Limit Table. Copy and paste address into new browser, https://www.fanniemae.com/content/tool/loan-limit-table.xls
JUMBO loans come in a variety of loan terms, FIXED rate, ARM's and INTEREST ONLY. Cash-Out, HELOC's (Home Equity Line of Credit) and rate and term refinances are available as well. Each type has it's own set of Qualification parameters. Call to find out more.
A typical purchase transaction will require the home-buyer to put down a minimum of 10%-20%, but in some cases as little as 5%.
Most Jumbo loan programs allow you to purchase 1-4 unit Single Family, Condo's, PUD's and Co-ops.
There are several ways to qualify for a Jumbo loan including full document (traditional qualification), bank statements (for self-employed borrowers) and asset depletion loans.
Full Documentation - This includes all standard documentation including 2 years of complete tax returns, business and personal.
Bank Statement - Qualification based on 12 or 24 months business or personal bank statements (occasionally a combination of the two). Different lenders calculate this differently, but most use total deposits that are from business revenue, then apply an expense ratio.
Asset Depletion - This method uses your existing investable assets, cash in bank accounts, stocks, bonds and other liquid assets then applies a ratio to each (i.e. cash is 100% value, stocks are 70% value), then divides the total by a term os 60 months or more to calculate your monthly income to be used for loan qualification.