Are you trying to figure out if your Santa Clara purchase will require a jumbo loan? You are not alone. In Santa Clara County, a small shift in down payment can move you from conforming to jumbo, which can change your rate, fees, and approval path. In this guide, you will learn how conforming and jumbo loans differ, where the county thresholds sit, how loan size affects pricing and requirements, and the practical steps to compare your options. Let’s dive in.
Conforming vs. jumbo basics
A conforming loan is a mortgage that meets Fannie Mae and Freddie Mac size and underwriting standards. These loans are widely traded and usually offer the most competitive pricing with standard options for private mortgage insurance.
The Federal Housing Finance Agency sets conforming loan limits each year. There is a national baseline and, in higher-cost markets, a county-level high-balance limit. Loans within these limits are conforming. Any mortgage amount above the applicable county limit is considered jumbo, which follows different underwriting and pricing rules.
Santa Clara loan limits today
For 2024, the FHFA set a national baseline conforming limit of $766,550 and a high-cost ceiling of $1,149,825. You can see the official figures in the FHFA announcement of 2024 conforming loan limits.
Santa Clara County historically qualifies for the high-cost ceiling. That means many buyers in Santa Clara, San Jose, Los Gatos, and nearby South Bay communities are working near the higher conforming cap. Always confirm the current year’s county number on the FHFA county loan limit map, because limits update annually.
When your loan turns jumbo
Your loan classification depends on loan size, not price. Use this quick math to see where you land:
- Mortgage needed = purchase price − down payment.
- Compare that mortgage amount to the current Santa Clara County conforming limit for the year.
- If your mortgage exceeds the county limit, you are in jumbo territory.
Here are simple 2024-style examples using the $1,149,825 ceiling for a one-unit home:
- $1,500,000 purchase with 20% down ($300,000) → $1,200,000 loan. That exceeds the limit, so it is jumbo.
- $1,250,000 purchase with 20% down ($250,000) → $1,000,000 loan. That stays conforming.
- $1,500,000 purchase with 25% down ($375,000) → $1,125,000 loan. That stays conforming.
The takeaway: in Santa Clara, your down payment often determines whether you can use a conforming program or must go jumbo.
What changes when you go jumbo
Credit and underwriting
Jumbo loans usually require stronger profiles. Many lenders look for higher credit scores, often 720–740 or more for best pricing. Debt-to-income caps can be tighter, and lenders typically ask for larger cash reserves, commonly 6–12 months of payments. Full documentation is standard, and self-employed buyers may face stricter review.
Rates and points
Historically, jumbo loans traded at slightly higher rates due to investor risk and lower liquidity. Today, the spread between conforming and jumbo varies by lender and market conditions. You may see similar pricing at times, or a modest premium. Expect that fees and points can be higher for jumbos, with pricing step-ups as loan size or loan-to-value rises.
Mortgage insurance and LTV
Private mortgage insurance is designed primarily for conforming loans. Some lenders offer jumbo mortgage insurance, but availability and cost vary. Many jumbo programs expect larger down payments, often 20–30% for best terms. Some lenders allow 10–15% down with strong credit and reserves, but pricing and requirements can be stricter.
Product types
You will find fixed-rate jumbo options across 30, 20, and 15-year terms. Adjustable-rate jumbos are common too and may offer lower initial rates for borrowers comfortable with rate risk. Some banks hold jumbo loans in portfolio and may offer specialty terms or alternative documentation, often at higher rates and with stricter balance-sheet rules.
Alternatives to one jumbo loan
- Increase the down payment. If feasible, this can pull your loan under the county limit and access conforming pricing.
- Use a piggyback. Pair a conforming first mortgage at up to 80% with a second lien or HELOC for the remainder. This can reduce first-lien size, but second liens often carry higher, variable rates and add complexity.
- Explore portfolio or non-QM options. These can fit unique income or asset profiles, though pricing and reserves are typically tougher.
Quick buyer checklist
- Set your target purchase price.
- Decide your planned down payment.
- Calculate mortgage needed = price − down payment.
- Check the current Santa Clara County conforming limit on the FHFA county loan limit map.
- If your loan exceeds the county limit, prepare for jumbo requirements.
Smart questions to ask lenders
- Will my loan be conforming, high-balance conforming, or jumbo for my scenario?
- What credit score, DTI, and reserve rules will you apply to me?
- What are today’s rate and APR for both conforming and jumbo, including points and fees?
- If I increase my down payment, how much could my rate or fees improve?
- What jumbo programs fit my profile? Any portfolio options I should consider?
- If I use a piggyback or HELOC, what are the total costs and risks over time?
- For condos or multi-unit properties, are there extra underwriting overlays?
Timing and cost tips
- Shop multiple lenders. Jumbo appetite and overlays differ, so pricing can vary meaningfully.
- Watch lock strategy. Jumbo pricing can move quickly. Ask about lock terms and any float-down features.
- Budget for cash needs. Jumbos often require more reserves and may carry higher closing costs.
Local take and next steps
In Santa Clara County, prices in many neighborhoods sit near the high-balance threshold. A small change in down payment can unlock conforming pricing, or push you into jumbo with tighter approvals. Your best move is to run the numbers against the current county limit, compare conforming and jumbo quotes side by side, and choose the structure that fits your budget, risk tolerance, and timeline.
If you want a clear, data-backed game plan for your Santa Clara purchase, let’s talk through scenarios, quotes, and tradeoffs so you can buy with confidence. Book a Consultation with Brett Bynum for one-on-one guidance.
FAQs
What is a jumbo loan in Santa Clara?
- It is any mortgage amount above the current Santa Clara County conforming loan limit posted by FHFA, which places it outside Fannie Mae and Freddie Mac guidelines.
What are the 2024 conforming limits?
- For 2024, the national baseline is $766,550 and the high-cost ceiling is $1,149,825, per the FHFA 2024 announcement.
How do I check Santa Clara’s current limit?
- Use the FHFA county loan limit map and select California, then Santa Clara County, to confirm the latest one-unit cap.
Do jumbo loans always have higher rates?
- Not always. The rate spread between conforming and jumbo changes with market conditions and lender appetite, so you should compare real, same-day quotes.
Can I avoid a jumbo with a piggyback loan?
- Often, yes. A conforming first plus a second lien or HELOC can reduce your first-lien size, but weigh the higher, variable rates and added complexity.
How much down payment do jumbos require?
- Many programs price best at 20–30% down. Some lenders allow 10–15% down with strong credit and reserves, though pricing and standards can be stricter.
