Jumbo Loans
Fannie Mae and Freddie Mac both have limits on the value of homes that these associations protect. Homebuyers who can afford to take out a loan on homes with a value higher than the conforming loan limits can utilize jumbo loans to make their purchase.
Benefits of a jumbo loan
The only benefit of a jumbo loan is that one allows you to purchase a home that exceeds the mortgage limit of the region of the United States where that home is located.
If a borrower needs to borrow more than that mortgage limit, then their only option is to apply for a jumbo loan, which is not backed by the Federal Housing Finance Agency.
Who qualifies for a jumbo loan?
Because there is no federal backing for jumbo loans, there is a much more comprehensive set of requirements or a borrower to get one. Here are the criteria that most lenders require for a borrower to qualify for a jumbo loan:
• A borrower must have a credit score of at least 700.
• A borrower must have a debt-to-income ratio of at least 43% or less (usually less).
• Income requirements depend on the total value of the home being purchased, but only high-income individuals are usually considered for jumbo loans.
United States loan limits
For most of the United States’ nearly 3,000 counties, the loan limit that is covered by the government.
• The vast majority of United States counties have a loan limit of $806,500 (as of 2025).
• States and territories that are not a part of the continental United States, such as Hawaii, Guam, and Alaska, (among others) have a maximum loan limit of up to $1,209,750 (as of 2025).
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