Shopping in La Jolla, Del Mar, or Encinitas and wondering if your mortgage will be “jumbo”? You are not alone. In many North County and coastal neighborhoods, list prices often push past standard loan caps, which can change how you qualify, what you need to document, and the rate you receive. This guide breaks down what a jumbo loan is, how it compares to conforming loans, what lenders look for, and the San Diego factors that can affect your timeline and budget. Let’s dive in.
Conforming vs. jumbo: what it means
A conforming loan meets Fannie Mae and Freddie Mac rules and stays at or below your county’s conforming loan limit for the property type. A jumbo loan is any first-lien mortgage that exceeds the applicable conforming limit for your county and unit count.
As of 2024, the Federal Housing Finance Agency (FHFA) set the national baseline conforming limit for a one‑unit home at $766,550. In designated high‑cost areas, the conforming cap can rise to $1,149,825 for a one‑unit home. You should verify San Diego County’s current-year designation using the FHFA’s official resources because limits update annually. You can view the FHFA’s current conforming loan limit materials and county lookup here:
- Review the current-year conforming loan limit information from the FHFA conforming loan limits page.
- Confirm San Diego County limits with the FHFA county-by-county lookup map.
2024 loan-limit tiers at a glance
| Tier | What it means | One‑unit reference level | What it implies |
|---|---|---|---|
| Baseline Conforming | Eligible for standard GSE programs if your county follows baseline | $766,550 | Loans at or below this amount may use conforming pricing and rules |
| High‑Balance Conforming | For designated high‑cost counties only | $1,149,825 | Loans at or below this amount in high‑cost areas may still be conforming |
| Jumbo (Non‑Conforming) | Above your county’s applicable limit | > county limit | Different pricing, credit, reserves, and appraisal review |
Always match the limit to your specific property type. Two to four unit properties have different caps.
What jumbo lenders look for
Every lender has its own playbook, but most jumbo programs share common themes.
Income documentation
- Expect two years of W‑2s and tax returns, plus recent pay stubs. If you are self‑employed, lenders typically require full personal and business returns. Alternative documentation programs exist but often cost more and come with stricter rules.
Employment and stability
- A continuous two‑year history in the same field is typical. Gaps usually need a written explanation and support.
Credit and DTI
- Many jumbo programs favor scores of 700+, with stronger pricing often at 720–740+. Debt‑to‑income caps often range from 43% to 50%, depending on the overall profile.
Assets and reserves
- Jumbo loans commonly require 6–12 months of PITI in liquid reserves for a primary residence. Second homes and investment properties often need more. Down payment and reserve sources must be documented. Gift funds are allowed by many lenders for primary homes, but they require a proper gift letter and paper trail.
Appraisal, property, and title
- Expect a full appraisal. For higher‑value or unique coastal properties, lenders may add extra valuation reviews. Condo buyers should plan for HOA and project review; some projects require additional documentation.
Other overlays
- Watch for seasoning on large deposits, stricter rules on rental income, and conservative treatment for non‑warrantable condos or specialty properties.
For a consumer‑friendly overview of mortgage steps and documents, visit the CFPB’s Owning a Home resources.
Down payments, PMI, and product choices
Typical down payments
- For primary homes, many lenders want 10% to 20% down, with 20% common for the best terms. Second homes and investment properties often require 20% to 30% or more.
PMI on jumbo loans
- Traditional PMI generally pairs with conforming loans. True jumbo loans above the county cap usually do not use PMI. That often means a larger down payment or lender‑specific risk sharing in place of PMI.
Portfolio vs. wholesale
- Some banks hold jumbo loans in portfolio and can tailor terms. Others sell to private investors and price to market. Options and pricing can vary widely across San Diego’s banks, credit unions, and brokers.
Non‑QM alternatives
- If you are self‑employed or have complex income, non‑QM options like bank‑statement or asset‑depletion programs may help. These typically come with higher rates and stronger reserve and down payment expectations.
Rates and timing: how jumbo pricing works
Conforming loans benefit from the liquidity of Fannie Mae and Freddie Mac. Jumbo pricing depends on lender funding costs, investor appetite, and your specific risk profile. In some markets, jumbo rates track close to conforming or even dip below. In risk‑off periods, jumbo spreads widen and jumbo loans cost more.
To see broad rate trends, review the Freddie Mac Primary Mortgage Market Survey. For week‑to‑week mortgage market context, check the MBA Weekly Applications Survey. Ask each lender about lock periods, extension fees, and any float‑down options. Jumbo lock policies can be stricter and more sensitive to market swings.
San Diego nuances that affect jumbos
Price tiers by neighborhood
- Coastal and North County luxury areas often exceed conforming caps. Expect more jumbo scenarios in communities like La Jolla, Del Mar, Carmel Valley, Encinitas, and Carlsbad.
Taxes and assessments
- California’s property tax system uses a base rate with potential local assessments. Plan for possible Mello‑Roos or special assessments when estimating PITI.
Natural hazard disclosures
- Coastal properties may involve additional due diligence, such as geologic or flood considerations. Lenders require hazard insurance and flood coverage if the property is in a flood zone.
Condos and HOAs
- Many coastal homes are condos. If a project is non‑warrantable, you may face higher down payments or a more limited lender set.
Appraisals in unique locations
- Lenders may request enhanced appraisal reviews for distinctive or high‑value coastal properties. Expect close attention to comps and any recorded restrictions.
Your jumbo‑readiness checklist
Bring these documents when you start the conversation:
- Two years of federal tax returns and W‑2s; two years of business returns if self‑employed
- Recent pay stubs covering 30 days
- Bank and brokerage statements for the last 60–90 days
- Documentation for large deposits or gifts
- A list of monthly obligations to estimate your DTI
- Statements for significant assets to verify reserves of 6–12 months of PITI
- If buying a condo, HOA documents or a project package
- Property details once in escrow: listing, contract, disclosures, preliminary title
Ask each prospective lender:
- Which conforming limit applies to my property and unit count this year, and can we verify it on the FHFA county lookup?
- What are the specific credit score, DTI, reserve, and down payment requirements for my target LTV?
- Do you offer portfolio or non‑QM options for complex income, and how do the rates and reserves compare?
- What are the appraisal and condo project review requirements for this property type?
- How do your rate locks, extensions, and float‑down options work?
Example paths to avoid surprises
You are targeting a North County coastal home and your projected loan amount sits near the county cap. Verify San Diego’s current limit with the FHFA lookup. If your loan amount exceeds it, you will be in jumbo territory with different reserve and documentation expectations.
You prefer a lower down payment. Some lenders allow 10% down for well‑qualified borrowers on primary homes, but expect higher reserves and possibly higher rates. Compare that path with putting 20% down to reach stronger pricing.
You are self‑employed with strong assets but variable income. A non‑QM program could fit, but plan for more documentation of assets and larger reserves. Weigh the cost against a timeline that allows another year of tax returns to support full‑doc credit.
How Pacific Harmony Realty helps
When you shop in San Diego’s coastal and North County markets, you want clean guidance and a calm process. Pacific Harmony Realty offers white‑glove buyer representation, seller services, rental placements, and personalized valuations. We help you frame a smart offer strategy, introduce you to trusted local lenders, coordinate HOA and disclosure reviews, and manage the moving parts so you can focus on your lifestyle goals.
If you are weighing high‑balance versus jumbo, we will help you map the loan tiers to your target neighborhoods and budget, and time your search to market conditions. Ready to talk through your plan? Connect with Patrick Brown for a personalized consultation.
FAQs
What is a jumbo loan in San Diego in 2024?
- A jumbo loan is any first‑lien mortgage that exceeds your county’s conforming cap for the property type; verify San Diego’s current limit using the FHFA county lookup, noting the 2024 one‑unit baseline of $766,550 and high‑cost cap of $1,149,825.
Do jumbo loans always have higher rates than conforming loans?
- Not always; spreads change with market conditions and investor appetite, so compare quotes and track trends with the Freddie Mac PMMS.
How much down payment do I need for a San Diego jumbo?
- Many lenders allow 10% to 20% down for primary residences, with 20% common for stronger terms; second homes and investments often require 20% to 30% or more.
How many reserves do jumbo lenders usually require?
- Plan for 6–12 months of PITI in liquid reserves for a primary home, and potentially more for second homes or investment properties.
Where can I confirm my loan limit before I shop?
- Use the FHFA conforming loan limits page and the county lookup map to match your property type and unit count to the current year.
