Buying in San Francisco often means shopping above typical price ranges. If you are looking at homes or condos that push past standard loan limits, you will likely hear the term “jumbo loan.” It can feel complex at first, especially with stricter underwriting and unique local factors like appraisals and condo reviews. In this guide, you will learn when a mortgage becomes a jumbo in San Francisco, what lenders look for, how rates and products differ, and how to prepare a strong application. Let’s dive in.
Jumbo loan basics in San Francisco
A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency. Conforming loans can be purchased by Fannie Mae or Freddie Mac, while jumbos are financed by portfolio lenders or private investors. According to the FHFA, the 2024 baseline one‑unit conforming limit is 766,550 and the high‑cost area maximum is 1,149,825. San Francisco County is a high‑cost area, so any one‑unit loan amount above 1,149,825 is considered jumbo.
Home values in San Francisco often surpass the high‑cost limit, so many buyers end up in the jumbo market. Because these loans are not backed by the GSEs, lenders set tighter standards on credit, documentation, reserves, and property review. Rates for jumbos can be slightly higher than conforming loans, but the spread changes with market conditions and the borrower profile.
What lenders look for
Every lender has its own guidelines, but jumbo underwriting tends to be more conservative. Expect the following items to matter most.
- Credit score: Many lenders want a FICO score around 700 to 760 for the best pricing. Higher scores can unlock better terms.
- Down payment and LTV: Common jumbo limits range from 80 to 90 percent loan‑to‑value for well‑qualified buyers. Some programs allow 10 percent down with strong compensating factors. Very large super‑jumbos typically expect 20 to 30 percent down.
- Debt‑to‑income ratio: Maximum DTIs often fall around 43 percent, and sometimes up to 50 percent with strong reserves and credit. In competitive markets like San Francisco, lenders may lean conservative.
- Cash reserves: Plan for 6 to 12 months of total housing payments in liquid, verifiable assets. Higher loan amounts and non‑owner‑occupied properties may require more.
- Income documentation: Salaried buyers usually provide two years of W‑2s, recent pay stubs, and tax returns. Self‑employed buyers may need 24 months of returns, a year‑to‑date P&L, or alternatives like bank‑statement programs depending on the lender.
- Assets and gifts: Lenders verify funds for the down payment, closing costs, and reserves. Gift funds can be allowed, subject to program rules.
- Mortgage insurance: PMI is less common on jumbos. Lenders often prefer bigger down payments over PMI for lower risk.
Jumbo mortgages must still follow federal rules on ability‑to‑repay and disclosures. The Consumer Financial Protection Bureau provides helpful overviews of mortgage basics and compliance principles that lenders follow.
Fixed vs ARM jumbo options
You will typically choose between a fixed‑rate jumbo and an adjustable‑rate mortgage.
- Fixed‑rate jumbo: Predictable payments for the full term. Rates can be slightly higher than comparable conforming loans, but the gap varies.
- Adjustable‑rate jumbo: Popular with buyers who expect to sell or refinance within a few years. A 5/1 or 7/1 ARM may offer a lower initial rate, but it carries reset risk after the fixed period.
- Super‑jumbos: Loans that significantly exceed the county high‑cost limit. These often require larger down payments, stronger reserves, and more in‑depth underwriting.
Ask lenders for quotes using the same assumptions on loan amount, LTV, DTI, property type, and lock period. That way you can compare apples to apples.
Appraisals and condos in San Francisco
High values and unique properties can make appraisals more complex. Thin comparable sales, historic homes, and hillside lots often require a more detailed review. For larger loans, some lenders may order two appraisals to validate value. Expect higher appraisal fees and allow extra time for scheduling and completion.
If you are buying a condo, many lenders require a review of the building’s finances, owner‑occupancy mix, and any litigation. It is smart to confirm the project’s eligibility early because condo reviews and appraisal addenda can extend timelines. Your agent and lender should coordinate with the HOA or management company to collect needed documents.
Closing costs and local taxes
Closing costs generally scale with price and loan size. Title insurance premiums and escrow fees will increase for higher‑value transactions. San Francisco also has a city and county transfer tax that varies by price tier. Because tax rates and thresholds can change, plan ahead and confirm current brackets and total estimated costs with your escrow officer or real estate counsel.
How to get started and stay on track
A little preparation goes a long way with jumbos, especially in a competitive market like San Francisco.
Set your target budget. Research neighborhoods and price ranges to estimate your likely loan amount. If you can stay at or below the county high‑cost conforming limit of 1,149,825, you may qualify for high‑balance conforming programs with different pricing.
Get a full preapproval. For San Francisco offers, a verified preapproval is stronger than a soft prequalification. Expect more documentation for a jumbo preapproval and give your lender time to verify everything.
Choose a rate strategy. Decide if you prefer the stability of a fixed loan or the potential savings of an ARM. Discuss rate locks and timing, especially in a volatile rate environment.
Order the appraisal early. Coordinate access quickly and prepare for longer turnaround times. If you are considering a unique property, talk through appraisal risk before you write an offer.
Confirm condo eligibility early. If you are buying a condo, start the lender’s project review as soon as you go under contract to avoid delays.
Strategies to improve approval and pricing
Small changes can expand your options and sharpen your pricing.
- Increase your down payment to lower the LTV.
- Strengthen your credit score before applying.
- Build larger verifiable cash reserves.
- Consider an ARM if you are comfortable with potential future rate changes.
- If self‑employed, prepare clean financials or bank‑statement documentation and consider paying down debts to improve DTI.
- Compare several lenders, including portfolio and regional banks, and consider using a mortgage broker to access niche products.
Who lends jumbo loans in San Francisco
You will find options across different lender types.
- Large national banks and mortgage companies: Broad product menus and online underwriting.
- Regional and local banks or credit unions: Often competitive on pricing and sometimes more flexible with local property nuances.
- Portfolio lenders: Keep loans on their books and can be more flexible on documentation and property types.
- Mortgage brokers: Helpful for matching your profile to a lender’s exact overlays in a high‑cost market.
If you qualify for a loan amount at or below the San Francisco high‑cost conforming limit, you can seek high‑balance conforming programs that follow Fannie Mae and Freddie Mac rules. If you are a qualified veteran, ask your lender about VA financing. VA loans do not use PMI, and current entitlement rules can allow large loan amounts subject to lender underwriting and VA guidance.
What sellers should know about jumbo buyers
If you are selling a San Francisco property, there are a few points to watch when your buyer is using jumbo financing. Appraisals carry more weight at higher price points, so you may see appraisal contingencies or appraisal gap language. Buyers using jumbos often bring larger down payments, which can strengthen their offers. All‑cash buyers or jumbo buyers with strong reserves can both be compelling in competitive situations.
A quick compliance note
Even though jumbo loans are not sold to Fannie Mae or Freddie Mac, they still follow federal mortgage rules about ability‑to‑repay, disclosures, and fair lending. Lenders structure many jumbos to meet Qualified Mortgage standards, and you will receive the same core disclosures you would with a conforming loan.
Your next step
If you are exploring homes in San Francisco’s mid to upper price bands, early planning can save you time and money. A coordinated team that understands both local inventory and jumbo underwriting can help you move quickly when the right property hits the market. If you want a single point of contact for home search and financing, our family team is here to help.
Ready to map your budget, compare jumbo options, and get fully preapproved? Reach out to Now Homes for a friendly consultation, and we will walk you through your best path to a confident offer.
FAQs
What makes a loan a jumbo in San Francisco?
- For 2024, any one‑unit loan amount above the county high‑cost conforming limit of 1,149,825 is a jumbo. Loans at or below that threshold may qualify for high‑balance conforming programs.
How much down payment do jumbo loans require?
- Many lenders expect 10 to 20 percent down for purchase, with 20 percent or more preferred. Super‑jumbo loans often require larger down payments.
Are jumbo mortgage rates always higher than conforming?
- Not always. Jumbos often carry a modest rate premium, but pricing changes with market conditions, investor appetite, and your profile. Shop several lenders using the same assumptions.
How long does a jumbo loan take to close in San Francisco?
- Jumbo timelines can run longer than conforming loans due to appraisals and underwriting depth. Plan for about 30 to 45 days or more, and schedule the appraisal early.
Can self‑employed buyers qualify for a jumbo mortgage?
- Yes. Expect to provide two years of tax returns and possibly a year‑to‑date P&L. Some lenders offer bank‑statement or asset‑based programs with stricter reserve and pricing requirements.
Do jumbo loans require mortgage insurance?
- PMI exists for some products but is less common. Many lenders prefer larger down payments or different pricing structures instead of PMI.
Are there government options that avoid jumbos in San Francisco?
- FHA limits and many down‑payment assistance programs are lower than typical San Francisco prices. Some buyers look at lower‑priced neighborhoods or condos to stay within conforming or high‑balance limits.
