A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In 2026, loans above $806,500 in most areas are considered jumbo.
Conforming loan limits are the maximum amounts that Fannie Mae and Freddie Mac will purchase or guarantee. Loans that exceed these limits are called jumbo or non-conforming loans. Because they cannot be sold to these government-sponsored enterprises, lenders take on more risk and typically charge higher interest rates.
Jumbo loans usually have stricter qualification requirements. Expect to need a credit score of 700 or higher, a debt-to-income ratio below 43%, and significant cash reserves. Down payment requirements are often 10% to 20% or more, and lenders may require two appraisals instead of one.
In high-cost areas like parts of California, New York, and Hawaii, conforming loan limits are higher (up to $1,209,750 in 2026). If your loan falls between the standard limit and the high-cost limit, it may still qualify as a conforming loan. Check the limits for your specific county before assuming you need a jumbo loan.
A conventional loan is a mortgage that is not backed by a government agency like the FHA, VA, or USDA. Conventional loans typically require higher credit scores and larger down payments but offer competitive rates.
LTV (Loan-to-Value Ratio)The loan-to-value ratio is the percentage of your home's appraised value that is financed by the mortgage. LTV is calculated by dividing your loan amount by the home's value.
Credit ScoreA credit score is a three-digit number (typically 300 to 850) that represents your creditworthiness. Lenders use it to determine your mortgage eligibility and the interest rate you qualify for.
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