Jumbo
For loan amounts above the conforming limit, which comes up a lot in the Santa Clarita Valley. Rules vary a lot from lender to lender.
How it works
A jumbo loan is any mortgage above the conforming loan limit for the county. Because these loans cannot be sold to Fannie Mae or Freddie Mac, each lender writes its own guidelines and holds its own risk, which produces something you do not see anywhere else in the market: genuinely large differences between lenders on the same file.
This is the program where being a broker matters most. Two wholesale lenders looking at an identical jumbo borrower can land in different places on reserve requirements, treatment of restricted stock or bonus income, acceptable debt ratios, and pricing. A retail bank has one answer. A broker can go find the one that fits.
In the Santa Clarita Valley, the Los Angeles County high balance limit means a fair number of purchases people assume are jumbo are actually still conventional. Confirming which side of the line a purchase falls on is worth doing before anything else, because it changes the entire approach to the file.
Who it fits
This program is usually the right tool when:
- Purchase prices above the Los Angeles County high balance conforming limit
- Borrowers with strong credit and documented reserves
- Executives with bonus, commission, or equity compensation that needs careful documentation
- Buyers who want to compare structures across multiple lenders rather than accept one bank answer
What to watch for
The parts nobody leads with.
- Reserve requirements are typically substantially higher than conventional. Know the reserve figure before writing an offer, not after.
- Guidelines differ enough between lenders that a denial at one is genuinely not predictive of the outcome at another.
- Appraisal requirements are stricter, and some lenders require a second appraisal above certain loan amounts, which affects the timeline.
Common questions
At what loan amount does a mortgage become jumbo?
It depends on the county. Los Angeles County is a designated high cost area with a high balance conforming limit well above the national baseline, and the limits are adjusted annually. Any loan above the applicable county limit is jumbo. Because the figures change each year, confirming the current limit for your specific purchase is a step worth taking rather than relying on a number you read somewhere.
Are jumbo rates always higher than conforming?
Not necessarily. Because jumbo loans are priced by individual lenders rather than the agencies, jumbo pricing sometimes comes in comparable to or better than conforming for strong borrowers. This is another reason to compare lenders rather than assume.
Other programs