5% Low Downpayment Jumbo Loans in San Francisco: 2019 Update
Real estate in San Francisco, CA is a premium market. Naturally, San Francisco houses come in all shapes and sizes to cater to different needs and aesthetic sensibilities.. From awe-inspiring villas to lofty upscale apartments, there is no dearth of luxury living options in San Francisco. So, if you are looking to stake your claim on luxurious living, then you’ll likely require a jumbo loan in San Francisco. Thankfully, it’s not that hard to get them. In fact, you can even get low down-payment jumbo mortgages in San Francisco, if you know just how to get them
“So, how do I get a 5% Low Down-payment Jumbo Mortgage?”
Jumbo loans in San Francisco come with a slew of requirements. If you satisfy them, then you can get a Jumbo Mortgage with as little as 5% down-payment Here’s how:
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- A good FICO score is a must. A credit score of 660 is required if you have 10% down. If you are looking to put a down-payment of 5% , you will need a 740+ FICO score.
- Your debt-to-income ratio is taken in to consideration. If it’s under 43%, then you are eligible for any of the programs, even the 5% down-payment Jumbo mortgage. If your other qualifications are exceptional, then you can get a 10% down-payment jumbo mortgage even with a 55% Debt to Income ratio.
- Lenders require that you have repayment reserves. This is the additional amount you have after you pay down-payment and closing costs. Depending on your down payment size, you might be required to have repayment reserves enough to pay the monthly payment for the next 3 to 9 months. These reserves can be a gift, 401k, IRA, stock, or in checking/savings.
- Home buyers must disclose all their income and asset documents promptly.
- 5% down-payment jumbo loans are available only for standard single-family residential housing. This includes regular houses, town homes, and even condominiums. At 10% down 1-4 unit properties are allowed. Commercial properties and vacant land is not eligible.
- A maximum cap of $2,000,000 on loan amount applies on all jumbo loan programs with a down-payment of 5%. With 10% down the loan amount can go as high as $3,000,000. Home buyers are not required to obtain private mortgage insurance even with these low down-payment options.
Do you qualify for some of these requirements and not sure about the others? We are here to help. Give us a call at (925) 322-0436
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Here are some more common questions answered.
What is a Jumbo Loan?
In short, a jumbo loan is any loan that exceeds the loan limits set by Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac are nicknames for the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLM) respectively. FNMA and FHLM are both government-sponsored entities that are mandated with the task to improve home buying in the country by making it easier to obtain a home mortgage. They do this by supporting a secondary home mortgage market that reduces the risk of lending for mortgage lenders.
The Federal Housing Finance Agency (FHFA) sets the limits for conforming home mortgage loans across the country. Loans that go beyond these limits are called jumbo loans.
What is the Size of a Jumbo Loan?
There are many criteria for a loan to qualify as a conforming loan, but the most important factor is the size of the loan.
FHFA decides the size of a conforming loan in different parts of the country. It is typically the same across the US, except for some high-cost locations like California, Hawaii, Alaska, Florida, and so on. In other words, the minimum limits for jumbo loans in San Francisco are much higher than in other parts of the country.
At the time of this publication, the standard conforming loan limit across the country for single-family homes is $484,350. However, for a high-cost location like San Francisco, the conforming loan limit is much higher at $726,525.
So, the minimum jumbo loan limit in San Francisco is $726,525. All home mortgages above this limit in San Francisco qualify to be called as jumbo loans.
For the full list of conforming loan limits in the US, clickhere.
What’s the fuss All About? How are Jumbo loans any different from regular home mortgages?
You must understand that conventional loans are easier to obtain primarily because they are approved by Fannie Mae and Freddie Mac. As it is easy to sell conforming loans in the secondary market, the risk that lenders incur is reduced significantly.
Jumbo loans that are not secured by Fannie Mae and Freddie Mac. So, it is much more difficult for the lenders and banks to sell them in the secondary market. They are taking a much bigger risk when lending jumbo loans. Therefore, lenders usually have tighter requirements for jumbo loans.
NOTE: Not all applicants will qualify. These Programs may have a higher interest rate, more points or more fees than other Programs requiring documentation. Minimum FICO, reserve, and other requirements apply. Programs may not be available in all states. Contact your Loan Officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change at any time without notice.