What is a Jumbo Mortgage in California?
A jumbo mortgage is a mortgage loan that exceeds the level of principal eligible for purchase by the housing finance companies Fannie Mae and Freddie Mac.
Limits
The mortgage loans that qualify for purchase by Fannie Mae and Freddie Mac have to have a principal amount lower than a certain dollar amount ceiling. The maximum loan amount is determined by Congress and varies based on property location. These loans are called conforming loans.
California Limits
In 2011, if you require a mortgage loan higher than $417,000 backed by a single-family property located in California, you will generally require a jumbo mortgage. However, if the property is located in certain high-cost areas in California, you will need a jumbo mortgage for a loan amount higher than $729,750 on a single-family property.
Bigger Properties
If you're buying a two-family, three-family or four-family residential property, you will need a jumbo mortgage if the loan amount is higher than $533,850, $645,300 and $801,950, respectively. If the bigger properties are located in high-cost areas within California, you will need a jumbo mortgage for loan amounts higher than $934,200 on a two-family property, $1,129,250 for a three-family property, and $1,403,400 in the case of a four-family unit.
Jumbo Loan Requirements
You cannot get a jumbo loan for a second home. Jumbo loans also typically require larger down payments than conforming loans and the interest rates are higher.
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