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Jumbo Loan Requirements Are Getting Stricter!

The Pandemic has triggered tighter requirements and it's making it more difficult for some borrowers to qualify for jumbo loans. These days, home buyers may have stricter credit score requirements and higher cash reserve requirements if they are trying to get a high balance loan. Lenders want low debt to income ratios, larger down payment requirements and some may not allow a loan on a vacation home or investment property.

As a reminder, a jumbo loan is a home loan greater than the conforming loan ceiling. These limits are enforced by the Fannie Mae and Freddie Mac programs. The limit for jumbo loans in Monterey County is $672,750 for 2020. Places like Carmel, Pebble Beach and neighboring towns have many homes that exceed the million dollar mark. Jumbo loans are not uncommon here.

Jumbo loans have added risk and some banks are having trouble finding investors to buy these loans. If they can't sell them, they have to keep them in their portfolio so they have to limit the amount they are willing to carry.

At the beginning of the Pandemic, some banks had stopped issuing jumbo loans altogether but if they are now doing them, a borrower will have to jump through a few hoops to get there. Make sure to shop around. Programs can vary!


“You Might Have a Tough Time Getting a ‘Jumbo Mortgage’ During Pandemic. Here’s What to Expect,” CNBC (July 13, 2020)

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