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What are conforming loan limits in 2025?
Conforming loan limits are the maximum loan amounts eligible for purchase by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac.
In 2025, the baseline limit for most U.S. counties is $806,500. Properties priced above this threshold require alternative real estate financing options.
Why do some homes exceed conforming limits?
Many high-value properties surpass conforming loan caps due to their location or structure.
These include:
- Luxury single-family homes
- Duplexes, triplexes, and fourplexes in urban centers
- High-value short-term rental properties
For real estate investors, financing properties above conforming limits enables access to better cash flow opportunities and prime market segments.
What are jumbo loans and how do they work?
A jumbo loan is a mortgage that exceeds the conforming loan limits.
Because GSEs do not back these loans, they carry stricter underwriting criteria and often higher interest rates.
Comparison of jumbo loans and conforming loans
- Loan Limit
- Jumbo: Above $806,500
- Conforming: $806,500 or less
- Loan Backing
- Jumbo: Funded by private lenders
- Conforming: Backed by government-sponsored enterprises (Fannie Mae or Freddie Mac)
- Credit Score Requirements
- Jumbo: Typically requires a credit score of 700 or higher
- Conforming: Minimum score usually around 620
- Down Payment Expectations
- Jumbo: Commonly between 10% and 30%
- Conforming: May be as low as 3%
- Debt-to-Income (DTI) Ratio
- Jumbo: Usually capped at 43%
- Conforming: More flexibility in acceptable ratios
Jumbo loans are a primary strategy for financing properties above conforming limits, particularly in high-cost real estate markets.
What are non-QM loans?
Non-qualified mortgage (non-QM) loans offer flexible underwriting standards and are not required to meet conventional lending criteria. They help homebuyers and real estate investors with irregular income or non-traditional documentation.
A jumbo loan is considered a non-qualified mortgage loan.
Advantages of non-QM loans
- Accept self-employed or asset-based income
- Use bank statements or rental income for qualification
- Can fund unique or unconventional property types
Considerations for non-QM loans
- Higher interest rates: Non-QM loans generally come with higher rates than conventional or conforming loans due to greater risk and limited secondary market support.
- Limited lender availability: Fewer institutions offer non-QM products, reducing borrower options and negotiating power.
- Stricter reserve requirements: Many non-QM lenders require larger cash reserves (e.g., 6–12 months of payments).
- Inconsistent underwriting standards: Criteria can vary significantly by lender, making it harder to compare offers directly.
How do lenders qualify borrowers for high-value real estate loans?
Lenders look for a strong financial profile when issuing large real estate loans:
- High credit scores: Typically 700 or above
- Low debt-to-income (DTI) ratios: Often under 43%
- Substantial down payment: Between 10% and 30%
- Income documentation: Or alternative verification for non-QM loans
- Cash reserves: Usually 6 to 12 months of payments
Meeting these criteria increases a borrower’s ability to finance properties above conforming limits.
FAQs on non-conforming loans
How do credit score requirements differ for jumbo loans compared to conforming loans?
Due to the increased lending risk, jumbo loans typically require higher credit scores, often 700 or above. In contrast, conforming loans may be available to borrowers with credit scores as low as 620.
Are there any specific regions where non-conforming loans are more common?
Wherever median sale prices routinely top the FHFA conforming limits—especially in coastal and rapidly appreciating inland metros—you’ll find that non-QM jumbo loans are common. In Florida, those areas include Naples, Miami-Dade, Palm Beach, Tampa Bay Metro, and Orlando Metro.
What are the typical down payment requirements for jumbo loans?
Most jumbo loans require a down payment of 10% to 30%, depending on the loan amount, property type, and borrower qualifications. Some lenders may allow lower down payments for high-credit, low-DTI applicants.
How do interest rates for jumbo loans compare to those for conforming loans?
Interest rates for jumbo loans are generally higher than those for conforming loans due to the lack of GSE backing and increased lender risk. However, rate differences can narrow depending on market conditions and borrower profiles.
What areas in Florida have different conforming limits?
In Florida, most counties follow the standard conforming loan limit of $806,500 for one-unit properties in 2025. In high-cost areas like Monroe County, the limit is up to $967,150 for a single-family property.
MIDFLORIDA can help finance properties above conforming limits
MIDFLORIDA offers customized loan solutions to help homebuyers and real estate investors finance properties above conforming limits.
If you're purchasing a luxury single-family home, a multi-unit rental, or an investment property in a high-cost market, MIDFLORIDA can provide jumbo loans tailored to your financial profile.
Secure your keys to your dream home in the Sunshine State. Start your application with MIDFLORIDA today.
