If you visit other websites looking for this type of loan, you will notice most start out with this one question: What is a jumbo home loan?
The short answer, like any other loan it is a mortgage to cover your property when the loan amount is higher than conventional, FHA, USDA, and VA limits. You already know the answer because you found us by searching for this specific loan type. We go further than other banks by focusing on the more important aspects you want to know, like, can and how will you get pre-qualified at a low attractive rate and term. As an FDIC Insured Bank, we provide jumbo loans in all 50 states.
This Jumbo Home Loan Guide is designed to provide you with the information needed to make the best possible decision on who you choose to process and close your loan. We take the small-town bank approach with the more significant 50 state bank risk being especially competitive on rates.
We’re probably not the first company you found when starting your online loan search. If it is, we’re lucky to have found each other first. Many jumbo lenders advertise for large property types who provide “not so great options,” so let’s get right to it and first take a short quiz to see if you are in the right place.
Respond “NO” To Any Of These Statements, And You May Still Qualify!
Each county in the U.S. has a limit set by Conventional, FHA, USDA, and VA guidelines that dictate the maximum amount they will loan on any property from a single-family up to a four-family. If you are higher than these loan limits, you will be required to obtain jumbo loan financing, which is more limited where you can go, how much you must have in downpayment or equity, and what rates you receive.
Our residential jumbo loans do not cover properties over four units, even if they are owner-occupied, because this falls more in line with commercial or apartment financing. However, if you are looking at 5 or more units, we do have those options available. Just ask one of our bankers to guide you in the right direction. We have multiple conventional and in-house portfolio loan programs available, even those who require verifying income using their personal or business bank statements.
If a direct relationship exists between the buyer and seller or the borrower and any party to the transaction, then the sale is deemed a Non-Arm’s Length Transaction. Parties to the deal include but are not limited to: Borrower/buyer, Seller, Employer, or Lender. Examples of non‐arm’s length transactions include sales between family members, renter buying from a landlord, employer to employee sale, and Borrowers employed in real estate or construction business involved in the construction, financing, or sale of the subject property.
Great, if you answered “YES” to each of these, you passed the first part of our pre-qual quiz. If you have a “NO” somewhere, then call us now, or take our eligibility checker to discuss your situation. Answering “NO” doesn’t mean you won’t qualify, it just means we need to find out which area is impacting your request.
Anyone offering you a guarantee for your jumbo loan is probably someone you want to avoid. It’s not guaranteed until you have met all conditions and closed your loan. But let’s discuss further how you can get the desired results.
Applying and getting pre-qualified for a jumbo loan is only the first step in the process; it doesn’t guarantee that you’ll get the rate, terms, or program you desire. Many factors go into achieving that low rate and great program you wanted, and that is “the speed at which YOU move.” Time plays against every borrower in a big way with any loan.
Rate Locks Expire: Many loans are locked for 30 days because the shorter term allows you to get the lowest rate possible. If you lose your rate lock by letting it expire or needing to extend it because you took weeks to get the items back, it will cost you more money or a higher rate. With rates recently rising, a higher price could make you no longer eligible for the loan you wanted. A long delay could require you to re-qualify for the loan again.
Programs Could Disappear: It’s happened before. We’ve witnessed a whole host of loan programs get wiped out overnight. Investors can choose to change their risk portfolio and stop offering programs altogether; that is why moving fast on the approval you have in your hand means taking action.
Your Job or Income Status Could Change: What if you lost your job, your income was reduced, or you wanted to take a new job, but it put your loan closing in jeopardy because you took too long? Any changes in your employment status could come back with more unfavorable terms or, worse, a complete loan denial.
Your Credit Score Could Dramatically Change: We’ve seen this happen many times before; a borrower maxes out their credit card for business, or they miss a payment because they weren’t paying attention, or judgment was filed for any host of reasons. Not closing quickly under the same credit terms is another reason underwriters require you to re-qualify or cancel the loan.
Find a lender you feel confident in and apply to get pre-qualified from that lender. Make sure the lender has the program you want, and if they don’t sound confident they can close this program and have experience and reviews doing so, then keep looking! You may want to check out our reviews to help give you this confidence.
Request a rate lock on your loan once you are pre-qualified and get your lender every item needed as fast as necessary to close your loan, so your rate lock doesn’t expire. Your side of the process is only complete when the loan is closed, not when you think you sent enough to satisfy the underwriters' request.
Take responsibility and move fast; as you know, rates have been rising lately. Wait too long, and you could end up with a higher interest rate, qualifying for a smaller loan than if you locked in faster on a lower price. It’s your job to ensure you meet all requirements, not the loan officer's or lender’s position to hold the file open as long as possible, paying for the rate lock extension out of their pocket. Locks cost money because your lender reserves the funds and rate you want. It’s your responsibility to ensure you move fast so as not to let that lock expire, or it could end up costing you.
Any site-built property, co-op, condo, townhome, or any approved modular home that is built and shipped to the site. These can be Owner Occupied, 2nd Home, and Investment properties. There are no age restrictions; however, they cannot be mixed-use, demolished, or razed homes.
Jumbo loans for Manufactured homes are rare, but only available under the VA option for Veterans for single-wide or multi-wide manufactured home larger than 400 sq. ft. and built after June 15, 1976. The property must not be on leased land or in a trailer park but on a permanent foundation with value supported by comparable homes.
Any property that consists of 2, 3, or 4 units. Examples are side-by-side or top and bottom duplexes or complete side-by-side units. These properties can be owner-occupied, 2nd home, or non-owner-occupied. However, any property consisting of multiple individual units does not qualify as a multi-family, it must be one structure.
Any approved PUD, townhouse, or condo must be approved or accepted by HUD, FHA, VA, Fannie Mae, or Freddie Mac agencies. Each program has specific guidelines that expand further. Co-Ops are allowed.
These terms (Conv., FHA, USDA, VA) refer to the program type, which is often decided based on your goals. The program selection may also be determined by other factors such as location, loan amount, borrower status, and the borrower’s desired transaction request. Each program has a different set of product offerings underneath it that are uniquely different. Let’s explain what these are.
The government does not insure conventional loans and typically requires a more substantial down payment or equity position to qualify. There are no 100% Conventional financing programs available for jumbo homes. However, we may be able to offer up to 89.99% on a purchase of up to $3,500,000 for a single-family home with qualifying credit scores. This is, of course, for well-qualified borrowers typically over a 740 credit score.
VA home loan benefits are some of the best available to Veterans and their spouses. Of all jumbo loan programs, the VA loan offers the highest loan to value, competitive interest rates, and comes with no mortgage insurance at all. More Veterans should take advantage of this program at every chance they can. Especially considering the VA has removed limits on their loans for fully entitled Veterans.
Sometimes Realtors will turn away this loan type, which means you’re working with the wrong realtor because they are the strongest of all government-backed jumbo home loan programs. The VA renovation program is not eligible for jumbo loans.
We offer multiple In-House Jumbo loans under our Portfolio program. These options are not backed by FNMA Conventional or VA Guidelines and offer peace of mind when conventional or VA options may not fit the home or client criteria. Some reasons to choose this option are if you need a higher loan to value than what is offered, you don’t qualify for VA loans, a debt ratio exception, or other qualified loan exceptions. We also have an internal committee that approves loans with compensating factors. Reach out to one of our bankers today or check your eligibility to discuss our in-house options.
*FHA does not allow for any loan over their county limits. However, many counties across the US can go up to $1 million when factoring in multi-unit properties. The USDA does not provide jumbo loan financing over the allowable county limits.
You most likely already have an idea of what loan program you need, want, or would like to have. But for those who are just learning about these program types, we want to explain them in more detail.
A jumbo purchase loan is used to buy a new primary residence, second home, or investment property. The types of jumbo and purchase loans we offer are Conventional and VA government back programs. Additionally, only the VA allows for jumbo financing on manufactured and modular properties.
A cash-out refinance, as it sounds, you're either taking cash equity out of your home to pay yourself for your personal use, or you're consolidating credit cards or other loans, thereby converting your equity and trading off for a lower monthly payment on all total debt. We have all Conventional and VA jumbo cash-out loans.
A streamline is strictly for those looking to lower their interest rate or modify their loan term only. No cash-out, debt consolidation, or renovation is allowed with this program. We offer the rate and term, Conventional, Jumbo Refi, and the VA Jumbo IRRRL streamline refinance.
A reverse mortgage is where you receive monthly payments from the home equity instead of making interest payments on your mortgage. If you are over 62 and your home is either paid off or almost paid off, it qualifies for a reverse mortgage. Reverse mortgage loans are attractive for those on fixed incomes who find it harder to pay for day-to-day necessities or use the equity to pay off higher-interest debt and eliminate their mortgage payment. If you have a Jumbo property with sizeable equity, you may be able to take advantage of a reverse mortgage up to current FHA HECM limits. While we don’t have a traditional jumbo reverse mortgage, limits are increasing annually for you to review this as a potential program for supplementing your retirement income.
Don’t let a property that is on large acreage pass you by. Contact us if you want that single-family, modular, or manufactured home on more substantial tracts of land, but your realtor is trying to steer you away. They aren’t making any more land; you want to get it while it’s available, and we want to loan against it for you.
The rate you obtain depends on many factors since rates change daily, sometimes multiple times a day; the quote you receive today will most likely be different tomorrow. That is, of course, if you have not locked in your loan.
Borrowers with a lower credit score may see a little higher rate than those with a much higher rating. This is because investors offer better rates the higher your score is. They do this because those with higher scores have proven to be of lower credit risk than those with higher scores.
Many people who borrow a mortgage with a lower credit score at a higher rate could raise their credit even if they took out a 100% loan six months to a year later. In cases where that happens, we’re always working with our existing clients and reviewing market conditions to offer an internal streamlined refinance.
The streamlined refi is a very effective loan to lower a borrower’s interest rate or modify their loan term. It is also possible to have a lower score to qualify for a VA streamline refinance, as this loan looks at your overall improvement to your financial situation and is not relying on your credit report.
Can we lend lower than 620 or 680 for the jumbo loan programs?
The jumbo loan program is one of the most strict credit score requirements due to the more substantial loan amount and risk involved.
Typically, a few things happen when a borrower scores under the guidelines.
The pricing adjustments for lower scores and loan amounts become a high risk for the lender. And due to us offering some of the hottest government-backed lending programs, we stay away from dancing with any loan that approaches what the government deems to be "high costs."
Some people can indeed have a 680 credit score with limited or no trade lines that could receive a denial; a credit score isn't the only factor in a credit report. It's important to show our underwriters you can make payments on time and are at low risk of defaulting on your home loan. For these reasons, jumbo loans have stricter requirements for active tradelines on your credit report.
If your credit score falls under the 620 / 680 requirements, there may be some areas where credit repair could help you become more attractive to lenders and underwriters. In many instances, you don’t have to go through a 3rd party credit repair company, as today’s lenders have tools to help you determine what moves you can make to improve your score. Do what is needed, and not only would you get a lower interest rate, you could qualify for a more substantial loan with better home options than if you settled for borrowing with worse credit.
While we accept almost every income type when verifying and approving these loans, the two we won’t loan on are stated income loans or bank statement-only loans.
W2 Full Time & Part-Time Employees
Self Employed
Active Military Income
Retirement, Pension, 401k regular disbursement income
Social Security or Disability income
12 & 24 Month Personal And Business Bank Statement options
It’s important to note that any change during the loan process in employment status, such as getting fired or switching jobs, is grounds for denial or re-underwrite. You want to avoid changing your job status while completing your loan. If there is the slightest chance something might change, you need to speak to your loan officer immediately about this.
Do not assume that your loan will still be approved because you are getting a better job offer. Changes like these scare underwriters and will increase the documentation you're required to provide. These changes could delay your closing, cost you a rate lock, or you could lose your purchase money escrow altogether if you’re under contract.
You will save thousands in lost time and money by being as upfront as possible with your loan officer.
You may ask, why do other lenders and even my local bank offer rates, shorter terms, or require higher down-payments?
That’s a great question!
Short answer, because they don’t want to take the risk a jumbo loan can bring. The higher the loan amount, the more significant the risk.
Longer answer...
Most lenders, brokers, and banks only have a few programs, not offering anything near the vast array of jumbo loan products we have. Their rates are higher and loan terms shorter because they can’t touch the monthly volume we produce. They don’t offer high loan-to-values because they still view jumbo loans as riskier products. We aim to be competitive on rates and programs.
Most are not seasoned veterans in the jumbo lending sphere, meaning the loan officer you worked with might never have closed a unique jumbo property before. In our opinion, this is a dangerous mix to get involved in. You need a banker that knows how to navigate these jumbo properties, and most of our bankers have 15-30 years of experience lending on jumbo homes in all 50 states.
Your local bank or credit union may be acting like they are doing you a favor to keep you with them, but they may not want your property type on their books. They may talk you into putting more money down or taking a higher rate, saying they are making an exception to the guidelines. In this case, their inability to be competitive or desire for your property type is costing you more just by staying loyal. Ask us about our VA jumbo loans for manufactured or modular homes if you have this type of property.
Richie, OK... so you've officially done something I've never seen in 22+ years selling real estate. Closed a VA Loan on 224 Acres, with a Manufactured Home. CONGRATULATIONS! and THANK YOU!!! Admittedly, I was skeptical (more like pessimistic) when James told me you were going to get this VA Loan completed. And I had many doubts along the way, because I'd seen so many VA Lenders fall flat on their faces, just before the Closing. BUT... You got the Job DONE! Occasionally, I find someone out there who has done an Outstanding Job, helping my Clients... and You are one of these! I'm now officially a FAN of You and Your Work. I would be honored to promote you and your services to other Agents within our company, and I intend to do so. I will call you when I've caught up on my work a bit... and learn more about how I can do my job better on the next VA transaction.
~Tom K. Realtor
THE FEDERAL SAVINGS BANK IS NOT AFFILIATED WITH OR ACTING ON BEHALF OF THE FHA, USDA, VA, OR THE FEDERAL GOVERNMENT.
*Subject to credit approval. Terms and conditions may apply. Property insurance is required on all loans secured by property.
*Messaging and Data Rates May Apply.
*VA eligibility is required for VA loan products. USDA loans are only available in USDA-eligible areas as designated by the USDA.
*We do not offer new dealer-manufactured home loans in New York, but we do offer modular and site-built land and home construction.
*Qualification for up to $50,000 extra is for qualified borrowers and can be applied to all loan programs. This is a separate unsecured consumer loan we will underwrite in-house at the same time as your requested mortgage loan. Please contact your banker to request this program and the applicable rates, terms, and conditions. Consumer unsecured lending programs prohibit loan proceeds from being used for down payment.
REALTOR® is a registered trademark of the National Association of Realtors and is not affiliated with NationwideHomeLoansGroup.com or The Federal Savings Bank.
†Subject to applicable law and lender approval, when represented by one of our participating real estate brokerage companies during the purchase or sale of a home or land, eligible Consumers may receive a rebate of up to thirty percent (30%) off of the fee to be received by the participating real estate brokerage company representing the respective Consumer, at closing, which rebate will be applied exclusively toward paying down that Consumer’s applicable closing costs. In no event shall any rebate be greater than the aggregate of all closing costs. Issuance of a rebate is subject to a participating real estate brokerage company’s receipt of its fee. The following states condition, or do not permit, the granting of a rebate by real estate brokerage companies (list is subject to change at any time): Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, New Jersey, Oklahoma, Oregon, and Tennessee. No remuneration is paid to The Federal Savings Bank or to any of our Bankers. This is a free program offered exclusively by us to help our consumers save on their real estate transactions.
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