Jumbo financing options continue to gain popularity for luxury home buyers across Alabama. Qualified homebuyers in Birmingham, Montgomery, Mobile, Huntsville, etc. have new options for up to 95% financing.
As of 2024, the standard conventional loan limit in Alabama (1 unit property) is set to $766,550. Multi-unit (2-4 unit) properties have higher loan limits, please see the complete county-by-county loan limit chart here. Any mortgage that exceeds this amount would be considered a “Jumbo” loan.
The median home price in Alabama is currently around $250,000, much less than the national average of over $400,000. Because of this, the vast majority of homebuyers will use regular Conventional or FHA financing. But what about borrowers in luxury neighborhoods where home prices are close to, or exceed $1m?
Below we will review things that applicants should know before applying. Please note, that due to ongoing market changes, some loan limit caps could change. Call us at the number above, or just submit the Quick Contact form on this page to learn more and get the latest updates about any program.
In the past, most jumbo loans required a minimum 20% down payment from many banks and lenders. The new good news is there are still select 10% and even 5% options available to qualified homebuyers.
Alabama 95% Jumbo Financing:
- 5% down jumbo mortgage options are available for loan amounts up to $1,500,000.
- No monthly mortgage insurance – PMI.
- All properties MUST be owner-occupied, or vacation homes. Financing options for investor/rental properties are available but require a minimum 20%+ down payment. DSCR loans for real estate investors are also available.
- A minimum 700 credit score is generally required to be approved.
- All the jumbo programs are fully “documented” loans. Buyers will need to be able to properly verify income (paystubs, W2, and/or tax returns) and assets.
- Buyers will need to document mortgage payment “reserves” after closing. This is the number of assets or savings that remain after the buyer’s down payment and closing costs are deducted. The amount of reserves will depend on the loan amount, credit, etc. 95% financing programs typically require a min of 3 months of reserves. Non-liquid retirement accounts often satisfy these requirements.
- All programs have the availability of 30-year, 15-year fixed rates, or adjustable interest rate (ARM) terms. The terms are fully amortized with principal and interest.
90% Jumbo Financing:
- 10% down jumbo options are available for loan amounts up to $2.0mil.
- No monthly mortgage insurance – PMI.
- The minimum credit score is 670, unless the loan amount exceeds $1mil, in this case, the requirements increase to 700.
- All other requirements listed above also apply.
- More expanded options and loan limits are available to borrowers with a 15% or 20% down payment.
The programs listed above apply to both standard purchase and rate-term refinance. Cash-out refinance is limited to 80%-90% for qualified homeowners. Read more about all the jumbo loan programs here.
Questions? Just submit the Quick Contact form on this page, or call us at the number above. We are available to assist you 7 days a week.
Happy to serve all of Ala: including Birmingham, Jefferson County, Shelby County, Tuscaloosa, Jefferson County, Montgomery, Mobile, and Huntsville.