Jumbo Loan

What Is an FHA Loan?

FHA loans are government-insured loans backed by the Federal Housing Authority. They are designed for low- to moderate-income earners and typically come with the lowest down payments.

For 2021, the FHA floor is set at $356,362 for single-family home loans. While this amount varies by county, this minimum lending amount covers 80% of all U.S. counties.

Jumbo Loan Qualifications

To qualify for a jumbo loan, you typically need at least a 20 percent down payment. Your expected monthly mortgage payment should be no more than 38 percent of your pretax income. Credit, debt-to-income, and financial requirements are often more stringent on jumbo loans.

Who Should Get a Jumbo Loan?

Jumbo loans are best for high-income earners with good credit and their eye on a higher-end home. They’re not the right fit if you’re buying a vacation home or investment property.

Pros and Cons of Jumbo Loans
Pros:
  • Available in fixed and adjustable rate options
  • Large loan limits
Cons:
  • Only available for primary homes, not secondary, vacation, or investment properties
  • Requires a high credit score
  • Requires 20 percent down