Jumbo vs. Conventional — California
Jumbo loan vs. conventional loan — what’s the difference?
The primary difference is loan size — but the implications run deeper. Here’s what California buyers need to know.
The core difference: loan size
A conventional loan falls at or below the FHFA conforming limit — $832,750 for a single-unit property. A jumbo loan is any mortgage that exceeds that limit. In most California markets, this threshold is reached quickly.
Side-by-side comparison
| Feature | Conventional loan | Jumbo loan |
|---|---|---|
| Loan limit | Up to $832,750 (1-unit) | $832,751 and above |
| Backed by | Fannie Mae / Freddie Mac | Lender-specific guidelines |
| Minimum credit score | 620–640 typical | 660–700+ typical |
| Minimum down payment | 3–5% on some programs | 10–20% most common |
| Mortgage insurance | Required below 20% down | Never required |
| Documentation waivers | Available via AUS | Not allowed — full doc required |
| Reserve requirements | Lower — often 2–6 months | Higher — often 6–24 months |
Key distinctions worth knowing
- No PMI on jumbo — even below 20% down, mortgage insurance is never required
- No documentation waivers — jumbo loans always require full income and asset documentation
- Stricter reserve requirements — jumbo commonly requires 12–24 months post-closing
- ARM restrictions — jumbo ARMs are not available above 80% LTV
In California, the choice between jumbo and conventional is usually made by the market. If the home costs more than $1M, you’re in jumbo territory.
Serving California homebuyers and investors — Orange County, Los Angeles, San Diego, the Inland Empire, and communities throughout Southern California including Irvine, Huntington Beach, Anaheim, Fullerton, Garden Grove, and Santa Ana.