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FHA Jumbo Loans: What To Know

Mortgage amounts are typically constrained by a county’s loan limits; however, jumbo loans offer the flexibility to surpass these limits, enabling you to secure additional funds for purchasing a more expensive home. If you seek a larger loan with a relatively modest down payment, you may consider an FHA jumbo loan.

Nevertheless, opting for an FHA jumbo loan entails meeting extra requirements and conditions. Let’s delve into the mechanics of an FHA jumbo loan and the qualifications necessary to obtain one.

Exploring the Concept of an FHA Jumbo Loan

An FHA jumbo loan is known for its relaxed down payment requirement and high borrowing limit, catering to qualifying borrowers. Unlike conforming loans, this government-backed mortgage doesn’t adhere to Fannie Mae and Freddie Mac’s standards.

While FHA jumbo loans allow borrowing beyond conforming limits, they aim to discourage overborrowing. You can’t seek a loan exceeding the home’s purchase price to pocket surplus funds, except for legitimate refunds linked to the mortgage.

Requirements for FHA Jumbo Loans

Borrower criteria for an FHA jumbo loan mirror those of a standard FHA loan.

  • A minimum credit score of 580 is required.
  • Ensure your debt-to-income (DTI) ratio remains at 57% or lower.
  • The residence must be a primary home for a single family, consisting of 1 to 4 units.
  • You are required to pay both an initial and a monthly mortgage insurance premium (MIP).

Besides meeting the standard FHA loan criteria, applicants must adhere to the specified jumbo loan prerequisites detailed below:

  • Lenders might stipulate that borrowers maintain a reserve equivalent to 12 months of expenses to support their monthly payments.
  • Buyers opting for jumbo loans can expect to incur elevated closing expenses compared to the typical 3% – 6% of the purchase price.
  • Jumbo borrowers might encounter elevated FICO® Score prerequisites depending on the FHA lender they choose.

FHA Jumbo Loan Limits: Understanding the Boundaries

FHA loan limits, established by the Department of Housing and Urban Development (HUD), can vary by county, similar to conforming loan limits. The number of units in the property being purchased also influences these limits. For instance, a 4-unit home will have a higher loan limit compared to a 1-unit home. The loan limits for FHA jumbo loans are determined by the lender or lending platform and the loan’s purpose. To explore your options in your current area and market, consider consulting with a loan officer.

Interest Rates for FHA Jumbo Loans

FHA loans provide competitive interest rates, particularly when compared to conventional loans. Similarly, FHA jumbo loan rates can be lower than traditional jumbo rates for borrowers with good credit. It’s important to note that FHA jumbo loans come with a monthly MIP in addition, so a lower rate doesn’t automatically translate to savings. Check out our 2024 mortgage interest rate forecast to anticipate the rates you might encounter.

Advantages and Disadvantages of FHA Jumbo Loans

Before diving into an FHA jumbo loan, it’s wise to weigh the benefits and drawbacks. Here’s a breakdown of the advantages and disadvantages of FHA loans, focusing on FHA jumbo loans.


  • FHA jumbo loans have maximum limits that exceed conforming loan limits.
  • FHA jumbo borrowers enjoy reduced down payments and greater credit score flexibility compared to those seeking traditional jumbo loans.
  • An FHA jumbo loan could offer more competitive interest rates compared to a standard jumbo loan.


  • Home buyers are required to buy mortgage insurance and make monthly Mortgage Insurance Premium (MIP) payments throughout the loan term..
  • Borrowers of jumbo loans incur elevated closing expenses.
  • Each county establishes a unique maximum loan limit.
  • Certain lenders might enforce stricter credit criteria for borrowers.

Discover the Elevation Mortgage Jumbo loan as a compelling alternative. Our Jumbo loan empowers you to buy a home exceeding conforming loan limits with a low 10.01% down payment, eliminating the requirement for private mortgage insurance (PMI).

Key Takeaway

Opting for a pricier home with minimal down payment can be an attractive choice for certain buyers. However, it’s crucial to weigh the advantages and disadvantages before deciding if an FHA jumbo loan aligns with your circumstances. Compare interest rates across various lenders and understand your county’s maximum loan thresholds to secure the most suitable loan for your needs.

Curious about the rates and terms you could qualify for on a mortgage? Begin the initial approval process today with Elevation Mortgage.

Picture of Reed Letson

Reed Letson

Reed offers two decades of expertise as a mortgage broker, focusing on veterans and first-time home buyers. With a strong grasp of real estate and mortgage markets, he empowers clients with practical insights. Reed's passion is guiding clients to build wealth through real estate investments and financing solutions.

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