Jumbo loan vs conforming loan
A conforming loan is a conventional loan up to the conforming limit set each year for the county and the number of units, and it follows Fannie Mae or Freddie Mac rules. A jumbo loan is larger than that limit; because the agencies do not buy it, each jumbo program writes its own rules.
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Is your loan jumbo?
Compare the loan amount, not the price, with the conforming limit for the county.
Fidelity Residential · NMLS #103098 · Equal Housing Lender
It comes down to the size of the loan
Fannie Mae and Freddie Mac buy most home loans, up to a limit set each year for each county and number of units. A conventional loan up to that limit is a conforming loan, and it follows the agencies’ rules.
A loan above that limit is a jumbo loan. Because the agencies do not buy it, each jumbo program writes its own rules for the down payment, credit and the savings you keep after closing, and the rules tighten as the loan grows.
Compare the loan amount, not the price, with the limit. The limit changes each year and is higher in high-cost counties, so a loan officer checks it for your address.
At a glance
- Conforming loan: up to the conforming limit; Fannie Mae or Freddie Mac rules; mortgage insurance with a smaller down payment
- Jumbo loan: above the limit; each program's own rules; no mortgage insurance; more savings and sometimes two appraisals
- Both: conventional loans, not insured by the government; fixed or adjustable
Conforming loan and jumbo loan compared
The questions that separate a loan within the limit from one above it.
| Question | Conforming loan | Jumbo loan |
|---|---|---|
| Loan size | Up to the conforming limit set each year for the county and the number of units, higher in high-cost counties | Above the conforming limit |
| Who sets the rules | Fannie Mae or Freddie Mac, reviewed through their automated systems | Each jumbo program writes its own rules, and they tighten as the loan grows |
| The down payment | Some programs for first-time and lower-income buyers allow a smaller down payment | The larger the loan, the larger the down payment programs ask for |
| Mortgage insurance | Usually required with a smaller down payment; monthly mortgage insurance can be removed later on request | Jumbo programs do not charge mortgage insurance, whatever the loan-to-value |
| Savings after closing | Not needed on many one-unit primary-home loans; second homes, rentals and multi-unit homes need some | Counted in months of payments, and the amount grows with the size of the loan |
| Income documents | Documented under the agencies’ rules | Most programs ask for full income documents; some accept bank statements or asset-based income instead |
| Appraisal | An appraisal of the home | One appraisal, or two from different appraisers on larger loans; jumbo loans do not use appraisal waivers |
| The home | A main home, a second home or a rental of one to four units | A main home, a second home and, in several programs, a rental property |
When a conforming loan fits better
When the loan amount fits under the limit for your county.
- The loan fits the limit. The loan amount, not the price, is at or below the conforming limit for the county and the number of units.
- A smaller down payment. Some conventional programs for first-time and lower-income buyers allow a smaller down payment, with mortgage insurance that can come off later.
- Fewer savings after closing. Many one-unit primary-home loans need no savings in reserve after closing.
- A second home or a rental. A conventional loan can finance a second home or a rental of one to four units.
When a jumbo loan fits better
When the loan amount is above the limit for your county.
- A higher-priced home. When the loan is above the conforming limit, a jumbo program finances it under its own rules.
- No mortgage insurance. Jumbo programs do not charge mortgage insurance, whatever the loan-to-value.
- Fixed, adjustable or interest-only. A fixed rate keeps principal and interest the same; an adjustable rate is fixed for a set number of years and then can change; some programs offer an interest-only period, after which the payment rises.
- Self-employed. Some jumbo programs accept bank statements or asset-based income instead of tax returns.
How to choose between them
Check the limit
A loan officer checks the conforming limit for the address and the number of units.
Compare the loan amount
The loan amount, not the price, decides whether the loan is conforming or jumbo.
Plan your savings
A jumbo program counts the savings you keep after closing in months of payments; the amount grows with the loan.
Compare the loan estimates
If your loan is near the limit, ask a loan officer to lay out both options for the same home.
Questions about jumbo and conforming loans
How do I know if my loan is jumbo?
Compare the loan amount, not the price, with the conforming limit for the county and the number of units. The limit changes each year, and it is higher in high-cost counties. A loan officer can check it for your address.
Who sets the conforming limit?
The Federal Housing Finance Agency publishes the conforming loan limits each year: FHFA conforming loan limits (opens in a new tab).
Do jumbo loans have mortgage insurance?
No. Jumbo programs do not charge mortgage insurance, whatever the loan-to-value. A conforming loan with a smaller down payment usually carries private mortgage insurance.
Is a jumbo loan a non-QM loan?
Not by definition. A jumbo loan is defined by its size. Most jumbo programs document income in full; some accept bank statements or asset-based income instead, and showing income without tax returns is one of the things that makes a loan non-QM. See non-QM loans.
Is a conforming loan the same as a conventional loan?
A conforming loan is a conventional loan within the conforming limit. Conventional loans are the ones not insured by the government; a jumbo loan is a conventional loan above the limit.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Near the limit?
Get a quote, apply online, or ask a licensed loan officer to check the limit for your address and lay out both options.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.