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
- Available in fixed and adjustable rate options
- Large loan limits
- Only available for primary homes, not secondary, vacation, or investment properties
- Requires a high credit score
- Requires 20 percent down