California military members and veterans tend to have a lot of questions about the VA…
The threshold for a jumbo mortgage loan in the San Francisco Bay Area has been increased for 2024. Federal housing officials have increased the conforming loan limit for the Bay Area, which in turn means that the jumbo loan threshold has gone up as well.
In 2024, any mortgage amount in the Bay Area that exceeds $1,149,825 is considered a jumbo loan. For borrowers who need even more funding, super jumbo loans can offer financing up to $5 million in some cases.
Both of these “oversized” loan products are fairly common in the San Francisco Bay Area, due to the relatively high median home value in the region.
What Is a Jumbo Loan Exactly?
Last month, the Federal Housing Finance Agency announced that it would be increasing the conforming loan limits for 2024. They made this change in response to home price increases that occurred during 2023, and you can read all about it in this related report.
But we should pause here to clarify some of the terminology being used, since it’s a common source of confusion among borrowers.
Here’s the basic difference between a conforming and jumbo mortgage loan:
Conforming: These loans meet the size and quality standards set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. This allows them to be bought and securitized by these entities, making them more attractive to lenders. So a “conforming loan limit” represents the maximum mortgage size that Fannie and Freddie can accept.
Jumbo: This is any mortgage loan that exceeds the conforming limit for the county where the home is located. These “oversized” home loans cannot be sold to Fannie Mae or Freddie Mac. Since they’re not purchased by the GSEs, lenders take on greater risk. This can bring stricter eligibility requirements for credit scores, down payments, etc.
Bay Area Jumbo Loan Amounts in 2024
As mentioned above, federal housing officials increased the conforming loan limits for 2024 due to rising home prices nationwide. This change affected most counties across the United States.
These limits vary by county because they are determined by local home prices. Here in the San Francisco Bay Area, the 2024 conforming loan limit will be set at $1,149,825. So anything above this amount would be considered a Bay Area jumbo loan.
This figure applies to six of the nine counties within the Bay Area region: Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara. If you live in one of these counties and need to borrow more than $1,149,825 in 2024, you’ve entered Bay Area jumbo mortgage territory.
What Does All of This Mean for Borrowers?
We talked about the risk factor above, and how it relates to jumbo mortgage loans. These loans bring additional risk for the lenders who offer them, and for two main reasons. There’s obviously a larger amount of money being loaned out, which means more risk.
Additionally, jumbo loans are not eligible for GSE purchase, which means the lender bears the full risk of default (unless the loan is sold off to investors).
That being said, it’s entirely possible to borrow more than the conforming loan limit for your county. In fact, jumbo loans are very common in the San Francisco Bay Area, due to the higher home prices in our region.
So don’t let any of these rules or limits discourage you from applying. If you have a sufficient level of income, a good credit score, and a manageable amount of debt, you could be a great candidate for a Bay Area jumbo loan!
Napa, Sonoma and Solano Have Lower Loan Limits
Officially, there are nine counties within the San Francisco Bay Area region. In six of those counties (Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara), the 2024 jumbo loan threshold is anything above $1,149,825.
The three exceptions to this are Solano, Sonoma and Napa counties. These three counties have lower conforming loan limits in 2024, and therefore a lower jumbo mortgage threshold as well:
- Napa County: $1,017,750
- Sonoma County: $877,450
- Solano County: $766,750
As we’ve explained in previous blog posts, Solano County is the most affordable real estate market within the broader San Francisco Bay Area. So it only makes sense that it would also have the lowest conforming loan limits and jumbo mortgage range as well.
How It Stacks Up Against Home Prices
In many counties across the country, the official conforming loan limits are set well above median home prices. But here in the San Francisco Bay Area region, the 2024 conforming loan limit is actually slightly below the current median home price.
According to a November 2023 report from the California Association of Realtors, the median sale price for existing single-family homes in the Bay Area was $1,268,940. That’s a bit higher than the 2024 conforming loan limit of $1,149,825.
This explains why the jumbo loan is such a common feature in our real estate market, along with parts of Southern California. Pricier housing markets tend to have a higher percentage of jumbo mortgage products, and that’s the case in our area as well.
Ready to Explore Your Financing Options?
Bridgepoint Funding is your local mortgage broker! We have roots here in the Bay Area and serve home buyers and homeowners all across the region.
As a broker, we have access to multiple lenders and can therefore offer a wide variety of mortgage options, including “super” jumbo loans up to $5 million.
If you’re planning to buy a home in 2024 and need a mortgage loan to make it happen, now is the time to start planning. And we can help you with this. Just contact our staff with any financing questions you have or to start the application process.