Conforming-loan borrowers can put far less down, sometimes as low as 3%.

Jumbo customers can also expect to make higher down payments, often 20% or more of the purchase price.

A conforming-loan borrower’s DTI can hit 50%. Debt-to-income ratioīorrowers’ debt-to-income ratio, or DTI, a number that compares the borrowers’ debts in relation to their gross income, generally can’t exceed 43%. By comparison, a borrower seeking a government-backed VA loan or FHA loan or a conforming loan can generally qualify with a credit score in the high 500s or low 600s. Credit scoreįor starters, jumbo borrowers need higher credit scores than what’s required for a government-backed loan, typically 700 or more. “When a chef has to eat his own cooking, he’s going to be more picky about his ingredients,” says Greg McBride, chief financial analyst at Bankrate, a personal-finance website. As a result, lenders make borrowers clear some higher hurdles to qualify for a jumbo. Government-backed mortgage investors Fannie Mae and Freddie Mac won’t buy these loans, so lenders hold jumbo loans on their balance sheets, taking on extra risk. The Federal Housing Finance Agency How to qualify for a jumbo loan Conforming Loan Limits for 2023 Loan limit range

Mtg define dredge