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So, here's what happened last quarter when I was updating our mortgage calculator. I got the most recent data from the Federal Housing Finance Agency and saw something interesting. According to the FHFA's announcement on November 26, 2024, the conforming loan limits for 2025 went up by $39,950 from 2024. That's a 5.2% increase. It means that you can now borrow more money before you reach the point where you need a jumbo loan, which usually has stricter requirements and higher costs.
Let me make this easier for you. When you're looking at homes that cost more than the average in your area, it's very important to know these limits so you can plan your budget. The difference between a conforming loan and a jumbo loan can mean thousands of dollars in your down payment, different interest rates, and even whether or not you can get one in the first place.
This is how you should think about it. The Federal Housing Finance Agency sets a limit on how much money Fannie Mae and Freddie Mac can buy or guarantee each year. These are the government-sponsored companies that buy most home loans. In most parts of the United States, the maximum price for a single-family home in 2025 is $806,500.
If you need to borrow more than that, you're getting into what the industry calls "non-conforming" loan territory. These are big loans. If you think about it, the name makes sense. You want to borrow a huge amount of money.
Most people are surprised to learn that jumbo loans aren't just for big houses or expensive properties. Differences in income affect people's ability to get housing in different areas, and this is a great example. If you live in a medium-sized city, $806,500 might get you a great house. But what about my coworkers who work with clients in Manhattan or San Francisco? In some neighborhoods, that same amount might not even be enough to buy a small two-bedroom condo.
The FHFA has to change the conforming loan limits every year based on how much the average home price in the U.S. goes up or down. They keep track of these changes with the FHFA House Price Index. The FHFA's report for the third quarter of 2024 says that home prices went up by an average of 5.21% between the third quarter of 2023 and the third quarter of 2024. This is why the baseline limit went up by the same amount.
2024 Baseline Limit: $766,550
Home Price Increase: 5.21%
Calculation: $766,550 × 1.0521 = $806,498.55
Rounded 2025 Limit: $806,500
That might seem like a small technical detail, but that extra ~$40,000 could be the difference between qualifying for a conforming loan with better terms versus needing a jumbo loan.
This is where things get more complicated. Every county in the United States does not have the same conforming loan limit. The FHFA calls some areas "high-cost areas" because housing costs are much higher than the national average. The conforming loan limit can be as high as $1,209,750 in these areas. That's 150% of the baseline limit.
The FHFA says that a lot of these expensive areas are in states like California, New York, Florida, Massachusetts, and Maryland. This means that if you buy a house in some areas of Los Angeles County or New York City, you can get a mortgage for more than $1 million and it will still be considered a conforming loan, which usually has better terms than a jumbo loan.
Alaska, Hawaii, Guam, and the U.S. Virgin Islands also have their own special laws. In these places, the baseline conforming loan limit is automatically set at the national ceiling, which is $1,209,750 for 2025. This is because housing costs in these areas are always higher than in the continental U.S.
Every year, the FHFA puts out an interactive map that shows the conforming loan limits for each county in the U.S. Just type "FHFA conforming loan limit map" into a search engine to find it on their website.
When I'm helping first-time buyers understand their options, I always recommend checking this map first. It takes literally two minutes, but it can completely change your home search strategy.
Let's talk about real numbers because that's what your monthly budget needs. Jumbo loans have much stricter requirements than conforming loans. Knowing these differences ahead of time can help you avoid surprises when you apply.
Most lenders will work with you if your credit score is 620 or higher, and you want a conforming loan. What are jumbo loans? Think bigger. According to data from several banks and credit unions surveyed in 2024 and 2025, most lenders want to see credit scores of at least 700.
But hold on, it gets even more specific. Some lenders want scores of 720 or higher for loans of $1 million to $1.5 million. Is it between $1.5 million and $2 million? In a lot of cases, you're looking at 740 or more. We at AmeriSave work with borrowers with all kinds of credit, but these are the general standards you should know about.
This is when things get serious for your savings account. First-time buyers may be able to get conforming loans with down payments as low as 3%. However, jumbo loans usually need 10% to 20% down. Depending on the loan amount and your overall financial situation, some lenders may want up to 30%.
That's a big difference in the amount of cash you need. And don't forget that these are the costs before closing, which usually range from 2% to 5% of the loan amount.
The average interest rate for a 30-year fixed jumbo loan was 6.72% on September 2, 2025, according to Bankrate's mortgage rate survey. The average interest rate for a traditional 30-year fixed conforming loan was 6.59%, which is 0.13 percentage points lower. But according to industry data, jumbo rates can be anywhere from 0.25 to 1.0 percentage points higher than conforming rates, depending on your financial situation and the state of the market.
I don't want to scare you away from jumbo loans. Sometimes they're the only way to get the house you want. You should know exactly how much this is going to cost before you start.
Lenders may accept debt-to-income ratios of up to 43% to 50% for conforming loans. Most lenders set the maximum for jumbo loans at 43%, but some would rather see it at 36% or lower. To find your DTI, divide your total monthly debt payments by your gross monthly income.
That borrower would be very close to the requirements for most jumbo loans. To get in a better position, they could either make more money, pay off their current debts, or put down a bigger down payment to lower their mortgage payment.
This is one that surprises people. Conforming loans may only need a few months' worth of payment reserves, but jumbo lenders usually want to see 6 to 12 months' worth of mortgage payments in your account after you've paid your down payment and closing costs.
When you add that to your down payment and closing costs, you have a lot of cash on hand. The lender wants this cushion because jumbo loans are riskier and they want to be sure you can handle financial problems without missing a payment.
I've worked in project management for mortgage technology, and I've seen how small strategic choices can have a big impact on results. If you're close to needing a jumbo loan, here are some options you might want to think about.
Now that the 2025 limits are in place, some buyers who would have needed jumbo loans last year might be able to get conforming loans instead. If you were looking at houses that cost between $770,000 and $806,000 in 2024, you were in the jumbo price range. What now? You're going along with it. That is not a small difference.
On November 26, 2024, the FHFA said what the new limits would be. They went into effect on January 1, 2025. Fannie Mae's Lender Letter LL-2024-03 says that loans sent to Fannie Mae or Freddie Mac in 2025 will have to follow these new limits, even if they were made before January 1st.
Even though not every lender offers it, it's good to know about this type of loan, which is sometimes called a "piggyback loan."
What's the good thing? If you live in an expensive area and your first mortgage is over $806,500, it might be conforming. The second mortgage has its own terms and rates, but you might not have to meet all of the requirements for a jumbo loan on most of your financing. Let me be clear: the book answer is that this can work very well. But you should really look at the numbers closely because second mortgages usually have higher rates.
Our loan officers at AmeriSave can help you figure out if this plan is right for you, but the way this product is set up depends on your qualifications and the property.
If you're open to moving, knowing about high-cost area designations could give you more choices. According to FHFA's 2025 data, some counties in Colorado, Connecticut, Idaho, Maryland, Massachusetts, Montana, Nevada, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Tennessee, Utah, Virginia, Washington, West Virginia, and Wyoming have higher conforming loan limits.
If you live just across a county line, you might be able to get jumbo financing instead of conforming financing. I'm not saying you should pick your home just because of the county's loan limits. There are a lot more important things to think about, like schools, commute times, and how well the community fits your needs. But if you're already looking at similar areas, it's worth a look.
One thing that basic talks often leave out is how loan limits change for properties with more than one unit. The FHFA sets different limits based on how many units there are:
If you're thinking about buying a duplex, triplex, or fourplex as an investment property or to hack your way into a house, these higher limits might keep you in the conforming loan range even if you pay more for it. Just remember that investment properties usually have extra requirements, like higher down payments and interest rates, whether they are conforming or jumbo.
Based on what I've seen while working on our digital lending platform, let me explain what you can expect if you're applying for a jumbo loan.
Because there is no backing from Fannie Mae or Freddie Mac, the underwriting process is more thorough. The lender is taking all the risk, so they will check everything very carefully.
When you get a jumbo loan, you usually need a more detailed appraisal than when you get a conforming loan. For high-value properties, lenders may ask for a second appraisal or a more experienced appraiser. This could make your closing take longer and cost more.
The Consumer Financial Protection Bureau says that you have the right to get a copy of any appraisal that the lender uses to make a loan decision. Some lenders may want a "desktop appraisal" and a full interior and exterior appraisal to prove the value of a property that costs more than $1 million.
When you borrow more money, changes in the interest rate have a bigger effect on your monthly payments. If you have a $800,000 loan, a 0.25% rate difference will have a bigger effect on your payment than if you have a $250,000 loan. Most jumbo lenders let you lock in a rate for 30 to 60 days, and some will let you lock in a rate for longer for a fee.
At AmeriSave, we try to offer jumbo loan options that are competitive and meet your needs while also taking into account the realities of the market. This helps you understand exactly what you're getting and why.
The Tax Cuts and Jobs Act made some changes that still surprise people. You can only deduct interest on up to $750,000 of mortgage debt on your federal tax returns if you took out the mortgage after December 15, 2017.
You can only deduct the interest on the first $750,000 of a $1 million jumbo loan. You can't deduct interest on the other $250,000. The IRS says that this limit only applies to acquisition debt, which is money borrowed to buy, build, or make major improvements to your primary or secondary home.
If you pay 32% in taxes, that $16,800 that you can't deduct means you're missing out on about $5,376 in tax deductions compared to if you could deduct the whole amount. When figuring out the real cost of your mortgage, this is definitely something you should talk to your tax advisor about.
It's important to remember that the current tax laws will end in 2025, and as of October 2025, it's still not clear what parts will be changed or renewed. Keep in touch with your tax professional to get the most up-to-date advice.
One thing I want to talk about is refinancing jumbo loans, which came up a lot during the rate swings we saw in 2023 and 2024. There are a number of reasons why it's harder than refinancing conforming loans.
First, there are fewer lenders who offer jumbo refinances than lenders who offer conforming refinances. Each lender has its own rules, so rates, fees, and qualification standards may be very different from one lender to the next.
Second, the closing costs for jumbo refinances are usually higher. They might be similar to conforming loans in terms of percentage, but the actual dollar amounts are larger because the loan amounts are larger. You need to be very careful when figuring out your break-even point, which is the point at which your monthly savings cover your initial costs.
If you plan to live in the house for more than five years, it makes sense to refinance. Less than that? Unless rates drop a lot or you have other good reasons, you might want to think about it again.
Not everyone has to worry about jumbo loans. But if you're in one of these situations, it's important to understand them:
I can't tell you what will happen in the future, but knowing how loan limits work can help you guess what will happen next year. In late November 2025, the FHFA will announce the 2026 limits. These will be based on how home prices change between the third quarter of 2024 and the third quarter of 2025.
If home prices keep going up at the same rate, we might see conforming loan limits go up again, which would give buyers more breathing room. If prices stay the same or go down, limits might stay the same or even go down a little bit. However, decreases are not very common in FHFA history.
The most important thing is to stay up to date as these news stories come out. If you want to buy a home in the next year, sign up for updates from your lender or check the FHFA website every so often.
It's not enough to just know the jumbo loan limits; you also need to know how that number affects your whole plan for buying a home. The increase to $806,500 in 2025 makes it easier for more people to get conforming loan benefits. However, if you're looking for a home that costs more than that in standard-cost areas or more than $1,209,750 in high-cost areas, you need to be ready for the jumbo loan requirements.
There is a reason why the qualifications are stricter. Without government backing, lenders take on more risk, so they need more proof that you can make the payments. That means you should have good credit, a lot of savings, a steady income, and not too much debt before you even start shopping. The good news is? If you meet these requirements, AmeriSave's jumbo loans can help you buy the home you want with terms that are competitive and meant for qualified borrowers.
Check your county's specific limit, figure out your real costs, including the tax effects and higher rates, and be honest with yourself about whether you're ready for the financial commitment. If you wait a year to save more money or improve your credit, you could save tens of thousands of dollars over the life of the loan.
References
There isn't just one jumbo loan limit because it changes from place to place. A jumbo loan is any loan that is more than $806,500 in most of the United States. In some high-cost areas, though, the conforming loan limit can go as high as $1,209,750. This means you have to borrow more than that to be in jumbo territory. The U.S., Alaska, Hawaii, and Guam The Virgin Islands automatically use the $1,209,750 ceiling as their baseline conforming limit. The FHFA's county-by-county loan limit map is the best way to find out what your exact situation is. It shows you exactly where the line falls in your area. Before you start looking for a house seriously, it's very important to check your county's conforming limit to see when you need a jumbo loan.
Yes, you can get a jumbo loan with a down payment of as little as 10%, but the rules for getting one vary a lot from lender to lender. Some lenders even offer jumbo loans with down payments of less than 10% to borrowers with good credit and a lot of money. But usually, putting down less than 20% means giving up something. You might have to pay private mortgage insurance and higher interest rates, and you'll definitely need to have better qualifications in other areas, like your credit score and cash reserves, to make up for the smaller down payment. The more money you put down, the better the terms will probably be. This is because you are lowering the lender's risk. If you're thinking about making a smaller down payment on a jumbo loan, expect the lender to carefully look at your income stability, credit history, and overall financial situation to make sure you can make the payments long-term, even though you won't have as much equity in the property from the start.
There isn't a set income requirement for jumbo loans because lenders look at your whole financial situation, not just your salary. That being said, a lot of people who take out jumbo loans make between $250,000 and $500,000 a year. This can change depending on the loan amount, your other debts, and the cost of living in your area. Your debt-to-income ratio is more important than the amount of money you make. Most jumbo lenders want your total monthly debt payments, including your proposed mortgage payment, to be less than 43% of your gross monthly income. Some lenders want it to be even lower, at 36% or less. If you want a jumbo loan of $800,000 with a monthly payment of $5,000 and you already have $1,000 in other monthly debt payments, you need to make at least $14,000 a month to meet the 43% DTI threshold. That comes to about $168,000 a year. The lender will also want to see that your income is stable and predictable, so they'll look at your work history, whether your income is going up or down, and any other things that might affect your ability to keep making the same amount of money.
Most jumbo lenders want borrowers to have credit scores between 700 and 720, but the exact number depends on a number of things, such as the loan amount, the size of the down payment, and the lender's own rules. Some lenders raise their credit score requirements to 720 or higher for loans over $1 million. For loans over $1.5 million, you may need a score of 740 or higher. Lenders have to meet these higher standards because they can't sell jumbo loans to Fannie Mae or Freddie Mac, which makes them riskier. Your credit score affects more than just whether you can get a loan; it also affects the interest rate. If everything else is the same, a borrower with a 740 score will usually get better terms than one with a 700 score. If your score is below these levels, you might want to wait a few months to improve your credit before applying. Pay off your current debts, make all of your payments on time, don't open any new credit accounts, and look for mistakes in your credit reports that might be lowering your score for no reason.
Yes, but the difference has gotten smaller in the last few years compared to what it used to be. Data from September 2025 showed that jumbo loan rates were about 0.13 to 1.0 percentage points higher than conventional conforming loan rates. However, the exact difference depends on the market and the borrower's profile. The difference in rates is because jumbo loans are riskier for lenders who have to keep them in their own portfolios instead of selling them to Fannie Mae or Freddie Mac. But if you have a lot of money, good credit, a big down payment, and a steady income, you might be able to get jumbo rates that are very competitive with or even the same as conforming loan rates. The jumbo loan market is more competitive now that more lenders are in it, which is usually good for borrowers. It's important to compare offers from different lenders because the prices and terms of jumbo loans can be very different from one lender to the next, which is not usually the case with regular loans.
Yes, you can refinance a jumbo loan, but the process is usually more complicated than refinancing a regular loan. There are fewer lenders who offer jumbo refinances, so you might not have as many choices. Each lender has its own rules for jumbo refinances, which can lead to big differences in rates, fees, and requirements for getting a loan. Because the loan amounts are bigger, jumbo refinances usually have higher closing costs in terms of actual dollars, even though the percentage is similar to that of regular loans. You need to figure out if the long-term savings from a lower rate are worth the upfront costs. This break-even analysis is especially important when the loan amount is bigger. Most lenders will want a new appraisal, proof of your full income and assets, and proof that you still meet the current qualification standards, which may be different from when you first qualified. You might have trouble refinancing even if you're current on your jumbo loan if your financial situation has changed, such as if your income has gone down, your credit score has gone down, or you've taken on more debt. If you want to refinance in the future, make sure you have good financial qualifications and plan ahead.
Jumbo loans usually take longer to close than regular conforming loans. The time from application to closing is usually 45 to 60 days, but it can be different. The longer time frame is needed because jumbo loans need more paperwork, a more thorough review by the underwriter, and sometimes extra appraisals or property inspections. Lenders are more careful with every part of your finances and the property because they are taking on all the risk and there is no Fannie Mae or Freddie Mac backing them. It can take longer to appraise high-value properties, especially if they have unique features or are in areas where there aren't many comparable sales. If you work for yourself or have complicated sources of income like rental properties, owning a business, or investment income, the paperwork and verification process will take longer. You can help things move along by having all of your paperwork in order and ready before you apply, responding quickly to any requests from your lender, and working with a loan officer who knows how jumbo loans work. If you're working under a contract deadline, give yourself more time than you would for a regular loan to avoid stress or problems with the contract.
If home prices go down after you close on your jumbo loan, you still have to pay back the full amount according to the terms you agreed to. You can't just walk away from the mortgage because the house is worth less than what you owe, and your monthly payment doesn't change. Even though this is a bad financial situation, it doesn't have to be a disaster if you can keep making your payments. What it means is that you have less freedom. Lenders usually want to see enough equity in the property before they will let you refinance. If you had to sell for some reason, you might not get enough from the sale to pay off your mortgage. In that case, you might have to bring cash to the closing or look into other options like a short sale. One reason why making a large down payment is a good idea is that it protects you from market drops. If you put down 20% and the price drops by 10%, you still have 10% equity to protect you. The most important thing is to make sure you can easily make the payments no matter what happens to home values. You should see your home as a place to live, not just as an investment.
This depends on how much you put down and what your lender needs. Most lenders will require private mortgage insurance to protect against the risk of default if you put down less than 20% on a jumbo loan. PMI does work a little differently for jumbo loans than it does for regular loans. If you have good credit, a lot of savings, or agree to pay a little more in interest, some jumbo lenders will let you avoid PMI even if you put down less than 20%. Some lenders may require PMI until you have 20% equity, which can happen through a combination of payments and appreciation. PMI costs more on jumbo loans than on regular loans because the loan amounts are bigger, which can add a lot to your monthly payment. If you want a jumbo loan with less than 20% down, make sure to ask lenders about their PMI requirements and costs so you can include these in your decision. Some people who borrow money choose to put down 20% to avoid PMI. This lowers their monthly payment and usually gives them better interest rates and terms overall. Figure out if it's worth it for you to stretch to reach that 20% threshold.
Yes, a lot of jumbo lenders will let you use money from family members as a gift for your down payment, but the rules are stricter than they are for regular loans. You will need to write a gift letter saying that the money is a gift and that you don't expect to get it back. The lender will usually want full proof that the money was moved from the donor's account to yours. Some lenders won't let you use more than a certain percentage of your down payment as a gift, so you'll have to put in a certain minimum amount of your own money. This shows that you really have "skin in the game" and that you can save money on your own. The donor may also need to show proof of their financial ability to make the gift, which some families find intrusive but is standard practice for jumbo loans because of the large amounts involved. Some lenders may only allow immediate family members to give gift money, not friends or more distant relatives. Talk to your lender early on if you want to use gift money so you know what they need from you and can make sure all the paperwork is ready before you need it. You don't want a problem with the gift fund to make your closing take longer.
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