Buying
Jumbo and high balance
Financing above the conforming limit, priced by portfolio lenders who keep the loan rather than sell it, and who therefore write their own rules.
The honest bitJumbo underwriting is relationship underwriting. The file that is declined at one bank is approved at another the same week, which is exactly why a broker beats a single lender here.
What this programme actually is
A jumbo loan is any mortgage above the conforming limit. Because Fannie and Freddie will not buy it, the lender either holds it on the balance sheet or sells it into a private securitization. Either way the guidelines are the lender's own, which is why two jumbo desks can quote the same borrower a rate a quarter point apart with completely different reserve requirements.
In the Richmond market this matters most in the West End, Windsor Farms and parts of Goochland, where prices cross the limit routinely. It also matters for buyers who want one loan instead of a first and a second.
There is a middle case worth knowing about. High-balance conforming exists in high-cost counties, but Virginia sits at the national baseline, so the jump from conforming to jumbo here is a cliff, not a step. A purchase at $820,000 with 5% down is a jumbo file; the same purchase with 3% more down is conforming, and often materially cheaper.
Jumbo and high balanceWhat is included when I run it
- A structure comparison: single jumbo, or conforming first plus a second lien, priced side by side
- Asset depletion and restricted stock income tested where it helps the file
- Reserve requirements mapped per desk before you choose where the file goes
- Two full appraisals coordinated where the loan amount triggers them
- Interest-only and 10/6 ARM options priced against the 30-year fixed
- Condo and non-warrantable review handled ahead of the appraisal, not after
How the file moves
- 01Desk selectionJumbo guidelines vary more than any other programme. We choose the lender before we choose the product.
- 02Full documentationTwo years of returns, all schedules, and asset statements covering the reserve requirement.
- 03Pre-approval with a credit reviewMost jumbo desks want a real underwriter to touch the file before a letter is issued.
- 04Appraisal or appraisalsAbove roughly $1.5 million many lenders require two independent reports.
- 05Conditions and reservesSourced and seasoned assets, with retirement accounts discounted to 60 or 70% of balance.
- 06Clear to closeWire instructions verified by callback to a known number. Jumbo wires are the most-targeted fraud in the business.
Why people choose it
One loan instead of two
No second lien at a higher rate, no piggyback to refinance later.
Guideline flexibility
Portfolio lenders can consider asset depletion, restricted stock and bonus history that agency rules ignore.
Interest-only is available
Useful where income is lumpy and the borrower wants to control amortization themselves.
Rate spread is negotiable
Jumbo pricing is far less standardised than conforming, so shopping is worth real money.
What moves your price
| Factor | How it behaves |
|---|---|
| Loan amount tiers | Pricing usually steps at $1m, $1.5m and $2m, and not always upward. |
| Reserves | The single most common reason a jumbo file is declined. |
| Property type | Non-warrantable condos and acreage over 10 acres narrow the lender list sharply. |
| Self-employment | Two years of returns plus a year-to-date profit and loss, often CPA-prepared. |
Answers
Jumbo and high balance: common questions
Something not covered here? Call (804) 555-0146 and ask.
Not always. Jumbo has periodically priced below conforming when banks wanted the balance-sheet assets. It depends on the week and the desk, which is why we quote both.
Ten percent is achievable for strong files under roughly $1.5 million. Above that, most desks want 20% or more, and reserve requirements climb with the loan amount.
Usually at a discount. Expect 60 to 70% of the vested balance to be counted, and expect to document whether the funds could actually be withdrawn.
A project that fails agency rules on owner-occupancy ratio, single-entity ownership, litigation or commercial space. Jumbo portfolio lenders are often the only route to financing one.
Is this the right programme for you
Twenty-five minutes on the phone will settle it. If a different programme is cheaper for your file, I will say so.
Three wholesale quotes on the same day's pricing, before you choose.