Approved homebuyers throughout California have new Jumbo financing options they never thought possible. Low down payment Jumbo loans are in high demand in locations like Santa Barbara, Riverside, Palm Springs, Temecula, Palmdale, and Stockton. However, most lenders and banks still require 20% or 10% minimum down payment for Jumbo loans.
However, as the housing market continues to increase in many cities throughout California, select lenders are relaxing Jumbo down payment requirements in 2020. With continued housing market stability, home buyers are seeing 5% down Jumbo options starting to emerge. Jumbo financing options are now available up to 95% – only 5% down payment. Below we will discuss all the highlights and restrictions that home buyers should know:
Important Update: Buyers should note with recent economic COVID impacts some low down Jumbo financing may be limited for a period of time.
90% and 95% Jumbo Mortgage Highlights:
- 95% options are available up to $2,000,000 loan amounts
- 90% options are available up to $3,000,000
- NO monthly PMI – depending on the loan amount and property state, home buyers will often have a choice of a single loan or combo loan options with no mortgage insurance
- Aggressive fix rates and adjustable-rate (ARM) term options available
- Both purchase and standard rate-term refinance. Cash-out refinances available up to 90% loan to value depending on the loan amount.
- Learn more about Jumbo Purchase & Jumbo Refinance requirements by clicking the highlighted links.
Low Down Payment Jumbo Loan Restrictions:
- The property (single-family home, townhome or condo) must be the homebuyers primary residence or vacation home. The 5% and 10% down payment jumbo options are not available for investor homes, vacant land, acreage, rehabilitation homes, or commercial properties.
- Applicants should have a min 700 credit score to be approved for 95% financing (680 for 90%) No BK or foreclosure, in the previous 5 years.
- Applicants will need to provide documentation for ALL income and assets. This is a full documentation loan – 2 years of tax returns and/or W2. “Stated income” or “No Doc” type loans are not permitted.
- Borrowers will need to have payment reserves after down payment and closing costs. The amount of monthly reserves (3-12 months) will depend on variables like loan amount, down payment, credit, etc.
- Only standard fix interest rates, or ARM terms. There are no “interest-only” options with the Jumbo programs.
Homebuyers can learn more about all the Jumbo mortgage guidelines here.
Serving all of California: Temecula, Santa Barbara, Riverside, Palm Springs, Palmdale, Stockton, Burbank, Calabasas, Costa Mesa, Modesto, Pasadena, Pomona, Santa Rosa. Oceanside, Glendale.