Jumbo Loans – Leaving the Winter Behind

Winter is settling in, and, once again, the perennial statement enters your head:

We have got to move someplace warm.

When considering taking out a jumbo loan in your Dream City, USA it is important to know that conforming loan limits are not the same everywhere you go. For most of the country, the FHFA’s baseline limit applies. Any loan amount above the limit is considered non-conforming, or jumbo, and will not be back by government-sponsored enterprises.

And beginning 2020, the FHFA announced, the baseline loan limit is being raised from $484,350 to $510,400.

This annually adjusted limit applies to all but 43 counties in the United States. Before we start daydreaming about a quaint million-dollar home in sunny Palm Springs, let’s take a look at the factors which affect conforming loan limits. 

High Cost Areas and Jumbo Loan Amounts

High cost areas are counties in which 115% of the local median home value exceeds the baseline. The conforming loan limit in these areas is set as a multiple of the median home value.

Take San Diego, for example, where the median home prices hovers just under $600,000 and the conforming loan limit will be $710,500. Now you may be asking yourself, what about places like San Francisco, where the median home price is over $1 million!? A conventional mortgage might require upwards of $100,000 dollars in the checking account for an area like that. Luckily, there is a ceiling set at 150% of the baseline. This means, no matter where you decide to flee in January 2020, the maximum conforming loan limit will be $765,600.

Conforming Loan Limits Out of State

Here are a few other locales of note. Some warm, some mild, and some for those who just cannot leave the thought of snow behind.

Orange County, California – $765,600

Nashville, Tennessee – $563,500

Bridgeport, Connecticut – $601,450

Honolulu, Hawaii – $765,600

Denver, Colorado – $575,000

Before you decide to leave town, check out today’s Jumbo Rates. Then plug-and-play in our Affordability Calculator to see how much ‘cabin on the cape’ you can afford. Want to learn more? Consult with one of our mortgage experts today.