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Complete Guide to Jumbo Mortgages for San Jose Homebuyers

This page updated and accurate as of February 11, 2025

San Jose is a thriving tech hub, and with that comes a robust real estate market, often driven by high-demand properties and home prices. For homebuyers in Santa Clara County, including San Jose, Sunnyvale and Palo Alto, navigating the mortgage landscape can be daunting—especially with the rising prices of single-family homes.

If you’re considering buying a home that exceeds the conforming loan limit, you may be looking into a jumbo mortgage. Today we will dive into jumbo loans, discuss the new low down payment options, and review the basic requirements, along with the pros and cons of going jumbo.

What Is a Jumbo Mortgage?

A jumbo mortgage is a type of loan that exceeds the conforming loan limit set by the Federal Housing Finance Agency (FHFA) for a specific county. In Santa Clara County, the conforming loan limit for a 1-unit property in 2025 is $1,209,750. If you need a loan amount higher than this limit to purchase your home, you’ll require a jumbo loan.

Unlike conforming loans, which are eligible for purchase by government-sponsored enterprises like Fannie Mae or Freddie Mac, jumbo loans are not backed by these entities, making them more of a risk for lenders. Because of this, jumbo loans tend to have stricter qualifications, but they provide an option for buyers to purchase high-value homes.

Here’s a look at the 2025 conforming loan limits for single and muti-unit property types in Santa Clara County: *Note: Santa Clara is a high-cost county, most counites in California are limited to $806,500 for standard conventional loans.

Property Units Conforming Loan Limit Jumbo Threshold
1-unit $1,209,750 > $1,209,750
2-unit $1,548,975 > $1,546,250
3-unit $1,872,225 > $1,866,000
4-unit $2,326,875 > $2,303,250

Jumbo Loans with 95% Financing:

For many homebuyers in high-cost markets like San Jose, coming up with a large down payment can be a significant barrier. Fortunately, new low down payment jumbo loan programs are making homeownership more attainable.

One of the exciting developments in the mortgage world is the introduction of jumbo loans with up to 95% loan-to-value (LTV) This means that qualified buyers can potentially purchase a home with just 5% down, allowing them to enter the housing market with significantly lower upfront costs. With rising home prices in California, these low down payment options provide a more accessible route for buyers looking to secure a larger loan.

Additionally, this 95% financing option can be used for homes priced well above the typical conforming loan limits. It’s an ideal solution for those who need a larger loan to afford homes in more costly neighborhoods like Willow Glen, Silver Creek, or Almaden Valley.

Important notes for 5% down payment options:

  • Eligible buyers should have a min 680 credit score
  • Loan amount limits are generally capped to $2m with 5% down
  • Primary residence properties only
  • Assorted fix rate and adjustable rate terms available

Jumbo Loans with 90% Financing:

For homebuyers looking to finance homes with a higher price tag, jumbo loans are available with up to 90% financing. This means buyers can secure financing for loans up to $3 million while only needing a 10% down payment. These programs cater to affluent buyers purchasing luxury estates or high-end properties that exceed the conforming limits.

Important notes for 10% down payment options:

  • Eligible buyers should have a min 660 credit score
  • Loan amount limits are generally $3m
  • Primary residence and vacation homes are eligible. Investment/rental properties are not eligible.
  • Assorted fix rate and adjustable rate terms available
  • Bank statement qualifying options available for self-employed borrowers.
  • Assorted rate-term reduction and cash-out refinance options available.

Basic Requirements for Jumbo Loans:

While jumbo loans can make buying a high-priced home more feasible, they come with certain requirements that vary from traditional conforming loans. Here are some of the basic eligibility requirements for jumbo loans, please find the Jumbo purchase page above for more details.

  1. Credit Score: Generally, a minimum credit score of 680-720 is required depending on the buyer down payment. However, higher credit scores may be necessary for larger loan amounts or more favorable terms.

  2. Down Payment: Depending on the program, down payments can range from 5% (for some low down payment programs) to 20% or higher for more traditional jumbo loans. Interest rates are generally more attractive when down payments exceed 10%.

  3. Income and Debt-to-Income Ratio: Lenders typically require a debt-to-income (DTI) ratio of 40%-45% or lower. This means your monthly debt payments (including the mortgage) should not exceed 40-45% of your gross monthly income.

  4. Cash Reserves: Lenders may require significant cash reserves to ensure you can cover the mortgage payments in case of an emergency. Typically, this is 3-12 months of mortgage payments depending the loan amount and LTV.

  5. Appraisal: Like other mortgages, a home appraisal is required to ensure the property’s value justifies the loan amount.

  6. Property Type: Jumbo loans are available for a wide range of properties, from single-family homes to multi-unit properties (2-4 units). The eligibility requirements can vary based on the type and value of the property.

Pros and Cons of Jumbo Loans

Before deciding if a jumbo loan is right for you, it’s important to weigh the pros and cons.

Pros:

 

  1. Access to High-Value Properties: Jumbo loans enable buyers to purchase homes that exceed the conforming loan limit, which is especially useful in high-cost areas like San Jose.

  2. Flexibility in Financing: With options like 90%-95% LTV financing, buyers can secure loans with lower down payments, freeing up more cash for other investments or expenses. This can also be a helpful tool for homeowner that have significant equity tied up in their current home they are waiting to sell later.

  3. Competitive Rates: While jumbo loans typically have slightly higher interest rates compared to conforming loans, the rates are often still competitive with other types of loans, especially with the growing availability of low down payment programs. Additionally, new piggyback combo loan options can be utilized to greatly improve the loan terms.

  4. No Mortgage Insurance (PMI): Unlike conforming loans, jumbo loans do not require private mortgage insurance (PMI), which can be a significant cost savings.

Cons:

  1. Stricter Requirements: Jumbo loans come with higher credit score requirements, larger down payments, and more stringent income verification processes, which can make them more difficult to qualify for.

  2. Larger Financial Risk: With larger loan amounts comes more significant financial responsibility. If your financial situation changes, paying off a jumbo loan could become more difficult.

  3. Limited Availability: Not all lenders offer jumbo loans, so you may have to work with specialized mortgage lenders or brokers to find the best rates and terms.

Final Thoughts:

Jumbo loans in San Jose, CA, can be a powerful tool for buyers looking to purchase high-priced properties in one of the country’s most competitive housing markets. Whether you’re eyeing a luxury home or seeking to invest in multi-unit properties, the flexibility of low down payment jumbo loans and high financing options make these loans more accessible than ever.

If you’re considering a jumbo mortgage, connect with us 7 days a week by calling or just submit the Quick Contact below to speak with a specialist now.