A good fit if
- You're buying or refinancing a higher-priced home
- You have strong credit and reserves
- You're self-employed and need a large loan (Non-QM jumbo)
Probably not if
- Your loan fits under the conforming limit
- You have limited reserves
- You want the most flexible credit guidelines
How Jumbo Loans Work
Fannie Mae and Freddie Mac only buy loans up to the conforming loan limit, which the FHFA sets each year and raises in high-cost counties such as Los Angeles. Anything above that is a jumbo loan, held by banks or private investors that set their own guidelines.
Because the loans are larger, lenders typically want stronger credit, more reserves, and sometimes two appraisals on very high-value homes. In return, jumbo loans let you finance a higher-priced home without splitting the purchase into a first and second mortgage.
Jumbo Loan Requirements
- Credit score: commonly 680–700 and up, with the best terms at 740+.
- Down payment: often 10–20% on a primary home, and more for second homes, investment properties, and very large loan amounts.
- Debt-to-income: usually up to 43%, with some lenders allowing more for strong files.
- Reserves: commonly 6–12 months of payments after closing, sometimes more above a few million dollars.
- Income: full documentation for traditional jumbo loans: W-2s, pay stubs, and tax returns.
- Appraisal: one appraisal is standard, and some lenders require two above a set loan size.
Requirements vary more between jumbo lenders than for conforming loans, which is why comparing several is worth it.
Non-QM Jumbo Loans for Self-Employed Borrowers
Traditional jumbo loans require full income documentation. Non-QM jumbo programs can qualify you with bank statements, a P&L, 1099s, or assets instead, and some offer interest-only payments or 40-year terms. Non-QM jumbo loan amounts commonly reach $3–4 million, and some lenders go higher for strong files. Read Non-QM loans explained.
Jumbo Loans for Investment Properties
High-value rentals can be financed with a jumbo DSCR loan, which qualifies on the property's rent instead of your personal income. Expect larger down payments and more reserves than on smaller DSCR loans.
Example: a buyer purchases a $1,800,000 home in Los Angeles with 20% down, a $1,440,000 loan. That's above the conforming limit, so it's a jumbo loan. The lender asks for 12 months of reserves, which the buyer documents with brokerage and retirement statements. Figures are illustrative only.
Jumbo Loans in Los Angeles and Other High-Cost Areas
In much of Los Angeles County, the conforming limit is higher than the national baseline, so some loans that would be jumbo elsewhere are still conforming here. Even so, many homes on the Westside, in the South Bay, and in the San Fernando Valley foothills need jumbo financing. Property taxes reset to the purchase price under Proposition 13, and insurance can be costly in wildfire areas, so build both into your budget early. A higher payment also raises the reserves most lenders require.
Jumbo ARMs and Interest-Only Options
Many jumbo lenders offer adjustable-rate mortgages with a fixed period of 5, 7, or 10 years, which can make sense if you expect to sell or refinance within that window. Some Non-QM jumbo programs add an interest-only period, which lowers the required payment early on but doesn't pay down principal. Both carry more payment risk later, so compare them against a 30-year fixed before choosing.
How to Qualify for a Jumbo Loan
- Check your credit. Small score improvements can matter more on a large loan.
- Document reserves, including investment and retirement accounts.
- Choose your documentation path: full doc, or Non-QM alt-doc if you're self-employed.
- Get pre-approved with a specific loan amount so your offers are credible.
- Compare lenders. Jumbo guidelines and pricing vary widely.
Documents You'll Need
- Two years of W-2s and tax returns, plus recent pay stubs (full-doc jumbo)
- Or 12–24 months of bank statements, a P&L, or asset statements (Non-QM jumbo)
- Two to three months of statements for every asset account
- Documentation of other real estate you own
- Photo ID
Jumbo vs. Conforming Loans
| Jumbo | Conforming | |
|---|---|---|
| Loan size | Above the conforming limit | Up to the conforming limit |
| Guidelines set by | Each lender or investor | Fannie Mae and Freddie Mac |
| Credit and reserves | Higher requirements | Lower requirements |
| Alt-doc options | Available through Non-QM | Limited |
Read the full jumbo loan guide.
Jumbo Loan FAQ
What is a jumbo loan?
A mortgage larger than the conforming loan limit for your county. Because Fannie Mae and Freddie Mac can't buy it, the lender or a private investor sets the guidelines.
Are jumbo rates higher than conforming rates?
Not always. Jumbo pricing depends on the lender and the market, and well-qualified borrowers sometimes get rates close to or below conforming rates.
What counts as reserves?
Cash, investments, and often a portion of retirement accounts that remain after closing, measured in months of your housing payment.
Can I get a jumbo loan if I'm self-employed?
Yes. Traditional jumbo lenders use tax returns, and Non-QM jumbo lenders can use bank statements, a P&L, or assets instead.
Do jumbo loans require 20% down?
Not always. Some lenders allow 10–15% down on a primary home with strong credit and reserves, while others require 20% or more, especially on larger loans.
Available for properties in California. Not all applicants will qualify. Loan approval and terms depend on credit, income, assets, property, and current lender guidelines. Not a commitment to lend.