Jumbo Loans in Florida 101: What Are Their Limits?

When it comes to buying a home in Florida, there are various financing options available. One such option is a jumbo loan, designed to help borrowers purchase higher-priced homes that exceed the limits of conventional loans.

In this blog post, we will discuss the basics of jumbo loans in Florida — what they are, who is eligible, and their limits.

What Is a Jumbo Loan?

A jumbo loan, also known as a non-conforming loan, is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These limits are in place to regulate the size of loans that Fannie Mae and Freddie Mac can purchase on the secondary market, and they vary by location and property type.

In most parts of the United States, the conforming loan limit is $548,250 for a single-family home. However, in high-cost areas, the limit can be higher.

Jumbo loans are not backed by Fannie Mae or Freddie Mac and are, therefore, considered riskier for lenders. As a result, they typically have stricter qualification requirements and higher interest rates than conventional loans.

Who Is Eligible for a Jumbo Loan in Florida?

To qualify for a jumbo loan in Florida, borrowers must meet specific criteria, which may vary by lender. Some standard requirements include:

1. Strong Credit Score: Borrowers should have a credit score of at least 700, although some lenders may require a score of 720 or higher.
2. Low Debt-to-Income Ratio: Lenders typically prefer a debt-to-income ratio (DTI) of 43% or lower, which means that your monthly debt payments should not exceed 43% of your gross monthly income.
3. Substantial Down Payment: A down payment of at least 20% is often required for jumbo loans, although some lenders may offer options with lower down payments.
4. Proof of Income and Assets: Borrowers should be able to provide documentation of their income and assets, such as pay stubs, tax returns, and bank statements.
5. Reserves: Some lenders may require borrowers to have a certain amount of cash reserves, typically equal to several months’ worth of mortgage payments, to cover potential financial emergencies.

What Are the Limits for a Jumbo Loan in Florida?

Jumbo loan limits in Florida depend on the county in which the property is located. In most counties, the conforming loan limit for a single-family home is $726,200. Any loan amount above this limit would be considered a jumbo loan.

However, in high-cost areas, such as Monroe County, the conforming loan limit is higher at $874,000. Therefore, a loan amount above this limit would be considered a jumbo loan in that county.

It’s essential to remember that jumbo loan limits are not set in stone and can change annually, depending on changes in the median home price and other factors. Additionally, individual lenders may have their limits and guidelines for the maximum loan amount they are willing to approve for a jumbo loan.

Final Thoughts

Jumbo loans in Florida offer a valuable financing solution for high-end real estate transactions, allowing borrowers to secure funding for luxury homes that exceed conventional loan limits. However, these loans come with stricter eligibility requirements and additional risk for borrowers and lenders.

If you’re considering a jumbo loan, it’s essential to work with an experienced mortgage professional who can help you navigate the application process and find the best loan option for your needs.

Are you looking for a jumbo loan in Cape Coral? American Mortgage Solutions FL is an excellent choice for you. Our experienced team can guide you through the process and help you with competitive rates. Start by messaging us for a jumbo loan quote today! We are llicensed in multiple states: Kentucky, Florida, Tennessee, Indiana, and Colorado.