The Loan Lady Blog

Super-Sized Loans - Jumbo Financing Returns 

Sunday, April 26, 2009 

When the real estate market flattened and then turned south, Jumbo financing was the first to go.  Jumbo financing refers to loans that are above the conforming loan limit--below that limit loans are backed by Fannie Mae and Freddie Mac.

For far too long we struggled with a low conforming limit that maxed out at $417,000.  Obviously, this was ridiculous for our high cost California Bay Area.  In 2008 the conforming loan ceiling was increased to $729,750 , then dropped to $625,500 January 1, 2009, and in May will be back to $729,500.

Since Jumbo financing is not backed by Fannie Mae or Freddie Mac, funds from mortgage market investors became limited, or priced 2% to 3% above conforming loan rates.

Reasonably priced Jumbo financing is slowly making a comeback.  I have two programs that are better than anything else out there, both priced in the mid-5% range.  One is a portfolio lender than goes up to $900,000 with 25 to 30% down.  Another is an exclusive source of funds that offers loans up to $2,000,000 with 30% down, but will allow a 10% second behind it. 

If you need Jumbo financing, come see me.