JUMBO

Financing high-value properties:

Jumbo loans, also known as non-conforming loans, are specialized mortgage options tailored for financing luxury properties and high-priced homes beyond the loan limits set by Fannie Mae and Freddie Mac. These loans are particularly common in competitive real estate markets such as Florida, catering to buyers who are unable to fully pay in cash for upscale properties.

Program features:

  • Loan Limits: While Jumbo loans previously catered to amounts exceeding $548,250 (as of 2021), the landscape has evolved. In 2024, the baseline conforming loan limit has been raised to $766,550 for most counties, and any loan above this amount is categorized as a Jumbo loan. Notably, in high-cost areas, this limit can soar up to $1,149,825, reflecting the varied real estate markets across different states and counties.
  • Down Payment and Credit Score: Typically, borrowers are required to make a down payment ranging from 10-20% or more. The credit score requirements have also tightened, with most lenders seeking a minimum score around 700. This demonstrates the stringent credit and income criteria associated with these loans. However, some lenders may accept lower down payments, offering flexibility based on the borrower’s financial profile.
  • Interest Rates and Fees: Traditionally, Jumbo loans were known to have higher interest rates and additional fees like application, appraisal, and closing costs. However, current trends show that Jumbo loan interest rates often align with those of conforming loans, making them increasingly accessible.
  • Documentation and Underwriting: Jumbo loans require extensive documentation for income and asset verification and undergo a rigorous underwriting process. This meticulous scrutiny became even more pronounced following the socio-economic impacts of the COVID pandemic.
  • Specialized Lenders and Programs: At Expansion Mortgage, our lender partners specialize in Jumbo and Super Jumbo loans, offering financing for properties ranging from $3M to $20M or more, subject to various factors. This specialization is particularly crucial for foreign nationals and those financing non-warrantable condos, as these scenarios require unique handling and expertise.
  • Asset Utilization and Bridge Loans: Borrowers have the opportunity to leverage their assets through programs like asset depletion or pledged asset programs. Bridge loans are also available, providing short-term financing solutions in urgent scenarios.

Jumbo loans present a viable pathway for acquiring luxury properties, especially for those without immediate liquidity. Despite inherent risks and demanding requirements, the market has diversified, offering a range of solutions for different borrower scenarios. At Expansion Mortgage, we stay abreast of these evolving trends and requirements to provide our clients with tailored financing options that align with their unique real estate aspirations and financial circumstances.