California Jumbo Loans: Top 10 Questions Answered

Jumbo loans are a popular mortgage option among home buyers in California, due to the expensive nature of our housing market. Borrowers use them to finance high-value homes and luxury properties.

But what is a California jumbo loan? How do they work, and what does it take to qualify?

• A California jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency. These limits vary by county.
• Jumbo loans cannot be sold to Freddie Mac or Fannie Mae, making them riskier. As a result, they often require higher credit scores and larger down payments.
• In California, lenders typically require a down payment of at least 10% and often up to 20% for jumbo loans, to offset the higher level of risk.
• The application and underwriting process for a jumbo loan is similar to other mortgage products, but approval is based on a thorough financial review.

1. What is a jumbo mortgage loan, exactly?

As the name implies, a jumbo mortgage loan is when you borrow a relatively large amount of money to purchase a home.

Specifically, a California jumbo loan is one that exceeds the conforming size limits established by the Federal Housing Finance Agency. If you take out a mortgage for more than the conforming limit for your county, you’re using a jumbo loan.

2. What are the conforming limits for California?

Conforming loans have a maximum mortgage size associated with them. These loans can be sold to Freddie Mac and Fannie Mae through the secondary mortgage market.

The size limits are imposed by the Federal Housing Finance Agency. Anything that exceeds the conforming limit is considered a California jumbo loan.

The government-imposed size limits vary by county because they are based on local home values. They can also change from one year to the next as home prices rise.

For most counties in the San Francisco Bay Area, the 2025 conforming loan limit is $1,209,750. In more affordable counties, like Riverside and San Bernardino, the limit is set at $806,500. So there’s a pretty broad range.

If you borrow more than your county’s conforming limit when buying a home in California, you will likely have to use a jumbo loan.

3. What are the requirements for a jumbo loan?

The qualification requirements for a jumbo loan can be more strict, when compared to the smaller conforming mortgage. That’s because there is more money being borrowed, bringing a higher level of risk.

There are no hard-and-fast rules that apply to all borrowers. But in general, you’ll need a good credit score and a sizable down payment to qualify for a jumbo loan in California.

Many lenders require at least 20% down for a jumbo loan. Some lenders might require the borrower to have additional cash reserves in the bank. These qualifications can vary.

Additionally, you need to have a favorable debt-to-income ratio that shows you can manage your monthly payments along with your other recurring expenses.

Credit score requirements tend to be higher as well, when someone is using a jumbo loan. But again, there is no single cutoff point or threshold.

4. Do they have higher mortgage rates?

This can vary over time. Sometimes, jumbo loans have a lower average mortgage rate than their smaller conforming counterparts. Other times, they can have a higher interest rate.

It partly depends on investor demand for the different types of mortgage loans.

When this article was published, in spring 2025, the average rate for a California jumbo loan was slightly higher than the average for a smaller conforming mortgage.

But again, this dynamic can change over time. So it warrants additional research.

5. How much do I have to put down?

Jumbo loans typically have higher down-payment requirements than the smaller conforming mortgages.

Conventional loans that fall within the conforming size limits mentioned earlier might allow for a down payment as low as 3%. But the required investment for a jumbo loan is usually higher, due to the larger amount being borrowed.

There is no single requirement that applies to all borrowers across the board. You might have to put down 10% or 20% on a jumbo loan in California, depending on the situation.

Please contact us if you have questions about these or other mortgage requirements.

6. Do I need to have perfect credit to qualify?

You don’t necessarily need flawless credit to qualify for a jumbo loan in California. But the general credit requirements can be a bit more strict, when compared to a smaller mortgage loan.

Credit scores are just one part of a broader picture that determines whether you are qualified for a mortgage. Even so, a higher score will definitely work to your favor when applying for a jumbo loan.

Mortgage lenders use credit scores as a kind of risk indicator when reviewing applicants and also when setting interest rates. So a higher score can help you qualify for financing and get a favorable rate.

7. Are there alternatives to using a California jumbo loan?

Yes, there are other ways to finance an expensive home purchase in California, without using a jumbo loan.

For example, some borrowers actually combine two different mortgages to finance a home purchase.

A common example is the 80/10/10 strategy. In this scenario, the borrower takes out one mortgage loan to cover 80% of the purchase price and a second loan for 10%. The borrower pays the remaining 10% in the form of a down payment.

That’s just one alternative to using a jumbo mortgage loan in California. There are other financing strategies available as well. Please contact us if you would like to explore your options.

8. What’s the most I can borrow with a California jumbo loan?

California jumbo loans can get pretty big.

Well-qualified borrowers often take out loans in excess of $2 million. Jumbo loans of $3 million or even $5 million are fairly common as well, given the expensive nature of our real estate market.

The maximum amount you can borrow will largely depend on your income situation, along with your recurring debts.

When we review borrowers, we want to ensure they are not taking on too much debt with the addition of a mortgage loan. Because that wouldn’t be in anyone’s interest.

The debt-to-income ratio is one of several tools we use to determine how much a person can borrow, based on their overall income and debt situation. We help our clients achieve their financing goals while also looking out for their best interests.

9. What kind of home can I purchase with a jumbo loan?

You can buy various types of homes with a California jumbo loan. There aren’t any government restrictions on how you can use it. As long as you meet the basic requirements for such a mortgage product, you could use it to purchase a primary residence, vacation house, or investment property.

10. How do I start the application process?

The application process for a California jumbo loan is similar to any other type of mortgage. Borrowers start by completing a standard application form, also known as the Uniform Residential Loan Application (URLA).

You will also need to provide a variety of documents relating to your income, assets, and earnings.

From there, the process unfolds just as it would for any other type of mortgage. You make an offer to buy the house, the property gets appraised, and the loan goes through the underwriting and closing process.

While California jumbo loans tend to have stricter qualification criteria, there usually aren’t any additional steps involved. In a separate article, we’ve outlined the mortgage loan process in California in greater detail.