How Much Is a Jumbo Loan in California?

A jumbo loan in California represents a mortgage that exceeds the standard limits set for conventional loans. These loans are designed to finance properties in areas where home values are significantly higher than the national average, a common scenario across many parts of California.

Understanding Jumbo Loans

Jumbo loans are a category of non-conforming mortgages, meaning they do not adhere to the loan limits established by the Federal Housing Finance Agency (FHFA). The FHFA sets these limits for loans that can be purchased or guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac, which are known as conforming loans. Since Fannie Mae and Freddie Mac do not acquire jumbo loans, these larger mortgages remain on the lender’s books, presenting a higher risk to the financial institution. This increased risk typically translates into more stringent qualification criteria for borrowers.

Lenders often require higher credit scores, larger down payments, and more substantial cash reserves for jumbo loans. These requirements serve as a safeguard against potential default, as the loan amounts are considerably larger than those of conforming mortgages. While conforming loans are standardized and can be easily traded in the secondary market, jumbo loans are often held in a lender’s portfolio, making their terms and conditions more varied depending on the individual lender.

California Jumbo Loan Limits by County

The amount considered a jumbo loan in California varies significantly by county, reflecting the diverse real estate markets across the state. For 2025, the baseline conforming loan limit for a one-unit property in most areas of the United States is $806,500. However, in many high-cost counties within California, this limit is substantially higher, reaching up to $1,209,750 for a single-family home. This means that any loan amount exceeding these county-specific conforming limits is classified as a jumbo loan.

For instance, counties such as Alameda, Los Angeles, Marin, Orange, San Francisco, San Mateo, Santa Clara, and Santa Cruz typically have a conforming loan limit of $1,209,750 for a one-unit property in 2025. In contrast, counties like Alpine, Butte, Fresno, and Sacramento have a standard conforming limit of $806,500. This wide range underscores the importance of checking the specific loan limits for the county where a property is located to determine if a jumbo loan is necessary. These limits are subject to annual review and adjustment by the FHFA to keep pace with changing home values.

How Jumbo Loan Limits are Set

The determination of jumbo loan limits is directly tied to the conforming loan limits established by the Federal Housing Finance Agency (FHFA). Each year, the FHFA analyzes data from the House Price Index (HPI), which measures average changes in home prices across the country. Based on these findings, the agency adjusts the baseline conforming loan limit for the upcoming year.

In areas designated as “high-cost,” where median home prices significantly exceed the national average, the FHFA allows for higher conforming loan limits. These high-cost area limits can be up to 150% of the baseline limit. This annual adjustment process ensures that the limits remain relevant to current housing market conditions, defining the threshold where a conventional loan becomes a jumbo loan.

Requirements for Jumbo Loans

Qualifying for a jumbo loan typically involves more rigorous criteria compared to conforming mortgages, primarily due to the larger loan amounts and the increased risk assumed by lenders. Borrowers generally need a higher credit score, often in the range of 700 to 740 or above, to demonstrate strong financial reliability. A substantial down payment is usually required, with many lenders expecting 10% to 20% or more of the home’s purchase price. For a multi-million dollar property, this can amount to a significant upfront investment.

Lenders also look for significant cash reserves, often requiring proof of funds sufficient to cover six to twelve months of mortgage payments after closing. Debt-to-income (DTI) ratios are typically scrutinized more closely, with many lenders preferring a DTI ratio of 43% or lower to ensure the borrower has ample capacity to manage the larger monthly payments. Additionally, the documentation of income and assets is often more extensive, including multiple years of tax returns, bank statements, and investment account details. These stricter requirements are in place to mitigate the heightened risk associated with lending such large sums.