Summary: In 2025, buying a home above $800,000 may require a jumbo loan with stricter qualifications.

From Yahoo Finance: 2023-12-15 13:46:00

In 2025, if you’re eyeing a home above $800,000, you may need a jumbo loan for higher-value properties. These loans exceed the FHFA’s conforming loan limits, with caps at $806,500 in most areas and up to $1,209,750 in specific regions.

Jumbo loans require borrowers to have cash reserves, excellent credit, proof of income, a low debt-to-income ratio, and a higher down payment of at least 10%. Lenders usually finance homes up to $2 to $3 million, with varying requirements and stricter standards.

While jumbo loans offer the option to purchase high-cost homes with potentially lower interest rates, they also come with stricter qualifying standards, higher cash reserves, and preference for larger down payments. Expect to pay higher closing costs and be ready for the accumulated interest over the years.

Qualifying for a jumbo loan can be challenging, requiring a higher credit score and a minimum 10% down payment. Lenders may ask for 10% to 30% down depending on the situation and may offer different term lengths and rate options for jumbo loans.

Read more: How to buy a higher-priced house in 2025