Jumbo Loans in San Jose: Limits, Rates, Basics

Are San Jose home prices pushing your search into jumbo loan territory? You are not alone. Many buyers in Santa Clara County find their ideal home is priced above the conforming limit, which changes how you qualify and what you need to bring to closing. In this guide, you will learn what counts as a jumbo loan here, how lenders underwrite these loans, how rates are priced, and practical steps to prepare. Let’s dive in.

What is a jumbo loan in Santa Clara County?

A jumbo loan is any mortgage that exceeds the conforming loan limit set for your county. Conforming loans meet Fannie Mae and Freddie Mac size limits and guidelines. Jumbos exceed those limits, so they are funded by private investors or held by lenders and follow lender-specific rules.

As of 2024, the high-cost conforming limit for a one-unit home in Santa Clara County was $1,149,825. The national baseline was $766,550. Limits adjust annually, so check the current FHFA limits when you are actively shopping. If your loan amount must be higher than the local conforming limit, you are in jumbo territory.

Why jumbos are common in San Jose: local prices for single-family homes and higher-end condos often exceed the county limit. Limited supply, strong incomes, and equity-driven purchases mean many buyers use jumbo financing for move-up homes and new construction.

Multi-unit and second home notes

Conforming limits differ by unit count. You might qualify for a larger conforming loan on a 2–4 unit property than on a single-unit home. Jumbos are also common for second homes and investment properties, where underwriting can be stricter.

How jumbo underwriting differs

Jumbo loans use guidelines that are more conservative than standard conforming loans. Expect more cash at closing, stronger reserves, and tighter documentation.

Down payment and LTV tiers

Many jumbo programs start at 10 to 20 percent down for well-qualified buyers. For the best pricing and the widest lender choice, 20 to 30 percent down is common. Lenders price in bands by loan-to-value, such as 60 percent or less, 60 to 75 percent, 75 to 80 percent, and above 80 percent. The higher the LTV, the tighter the rules and the higher the rate.

Standard PMI is uncommon on jumbos. If you want a lower down payment, lenders may offset risk with a higher rate, a second lien, or a proprietary insurance solution that is not widely available.

Reserves after closing

Plan to show more cash reserves with a jumbo than with a conforming loan. A common target is 6 to 12 months of the full mortgage payment for a primary residence. If the property is an investment, multi-unit, or if you are self-employed, reserve requirements can be higher.

Lenders define acceptable reserves differently. Some count only liquid assets such as cash or brokerage accounts. Others allow retirement accounts with conditions.

Credit score and history

Jumbo lenders favor stronger credit. Mid to high 700s is often needed for the best pricing. Low 700s may be possible with higher rates and more conservative terms. A clean credit history is important. Fewer late payments and established accounts help reduce perceived risk.

Debt-to-income (DTI)

Many jumbo programs cap DTI around 43 to 50 percent. Higher DTI can be approved when you have significant compensating factors, such as large reserves, excellent credit, or a larger down payment. If you receive bonuses or RSU income, lenders may treat that income carefully unless there is a stable history.

Employment, income, and documentation

Full documentation is the norm. Expect to provide W-2s, recent pay stubs, and two years of tax returns. If you are self-employed, be ready with business returns, profit and loss statements, and details on add-backs as allowed by your lender.

Tech compensation is treated differently by lender. RSUs, options, and bonuses can count as qualifying income if you document vested history and expected future vesting. Lenders may use a percentage of realized RSU income after taxes or require you to sell and deposit proceeds. Keep vesting schedules, employer letters, and brokerage statements handy.

Alternative and portfolio options

If standard documentation does not reflect your true capacity to repay, non-QM and portfolio options may help. Examples include bank-statement loans or asset-depletion programs for high-net-worth buyers. These cost more and vary by lender, but they can be a fit for complex profiles.

How jumbo rates are set

Jumbo rates are not tied to the same agency-backed market as conforming loans. Instead, pricing reflects investor demand and wholesale funding costs. Many lenders track Treasury yields and add a spread that moves with markets. Sometimes jumbo rates are slightly higher than conforming rates, and sometimes they are competitive or even lower.

Lenders adjust pricing for LTV, credit score, reserve strength, property type, and occupancy. Very large loan amounts can carry a surcharge. Second homes and investment properties generally price higher than primary residences.

Product types and tradeoffs

• 30-year fixed. Offers payment certainty, usually with a higher rate than shorter-term products. A fit if you plan to stay long term.
• 15-year fixed. Lower rate and faster payoff, but higher monthly payment.
• ARMs, such as 5/6, 7/6, or 10/6. Lower initial rate for a fixed period, then adjusts. Popular for buyers who plan to sell, refinance, or expect rising income before the adjustment window.
• Interest-only jumbo. Lowers payments during the interest-only period. You still owe principal later or at refinance. Useful in specific scenarios, but not for everyone.

You can also choose to pay discount points to lower your rate. Run a breakeven analysis to see how long it takes the monthly savings to repay the upfront cost.

Fees, appraisals, and rate locks

Jumbo loans can carry higher origination fees and stricter appraisal standards. High-value or complex properties sometimes require two appraisals. Rate lock timing matters. Locks can be extended for a fee and some lenders offer float-down features. Give yourself enough time for underwriting, appraisal, and condo review if applicable.

San Jose tech and move-up buyer tips

Using equity and stock wisely

Compensation in tech often blends base salary, RSUs, and bonuses. Lenders vary in how they count equity compensation as income. Document a history of vested RSUs and any stock sales that you plan to use for down payment or reserves. Keep clear records of vesting schedules and employer confirmation.

If your assets are concentrated in company stock, expect questions about liquidity and diversification. Some buyers explore securities-backed lines for temporary liquidity. These tools carry market and margin risk and may not count as income for mortgage qualification.

Move-up strategies in a competitive market

If you need to buy before you sell, you can evaluate bridge financing, a HELOC on your current home, or simply stronger cash reserves. Underwriters will look at all obligations together. In competitive situations, offers without sale contingencies can stand out, so plan your financing path early.

Time your purchase around vesting

If RSU vesting is a large part of your plan, timing can help. Lenders prefer to see vested shares converted to cash and seasoned in your account before the underwriting cutoff. Coordinate your shopping timeline with your equity vesting calendar when possible.

A simple local example

Imagine a $1.6 million single-family purchase in San Jose. If you put 20 percent down, your loan amount would be about $1.28 million. That would exceed the local conforming limit and fall into jumbo territory.

At 20 percent down, you should plan for stronger reserves, such as 6 to 12 months of payments, depending on your profile and lender. If you increase the down payment to 25 or 30 percent, you may see better pricing and easier guidelines. LTV bands, credit score, and reserves all interact, so getting quotes across a few down payment options can reveal meaningful savings.

Preparation checklist for San Jose jumbo buyers

1. Verify the current conforming loan limit for Santa Clara County to confirm whether your loan size is jumbo.
2. Check your credit. Aim to raise your FICO into the mid or high 700s for the best pricing.
3. Estimate your DTI with the new payment. Work to reduce DTI below about 45 percent when possible.
4. Build your cash position. Target your down payment and 6 to 12 months of reserves for a stronger file.
5. Gather documentation. Recent pay stubs, W-2s, two years of tax returns if needed, bank and brokerage statements, RSU and option paperwork, and employer letters.
6. Choose a product path. Compare 30-year fixed, ARM options, and interest-only features if relevant.
7. If you plan to use stock proceeds, a HELOC, or a securities-backed line, secure written evidence of availability and understand how your mortgage lender will treat it.
8. Get a written preapproval from a lender experienced with jumbo and equity-compensation profiles.

Common pitfalls to avoid

• Assuming PMI will solve a low down payment. Standard PMI is uncommon on jumbos. Plan for a higher down payment, stronger reserves, or different structures.
• Overlooking reserves. Many buyers budget for down payment and closing costs but forget the 6 to 12 months of reserves that lenders may require.
• Counting RSUs without proof. Lenders typically want a documented vesting and sale history or clear confirmation of future vesting.
• Ignoring DTI stacking. If you keep a HELOC on your current home or add a bridge, underwriters will include those payments when they calculate your DTI.
• Locking too late. Jumbo spreads can move with markets. Discuss lock timing and appraisal timelines so you do not miss your target rate.

Ready to plan your jumbo path?

You can buy with confidence when you understand jumbo requirements and prepare your file early. If you want local guidance on pricing, timing, and offer strategy for San Jose and nearby markets, connect with Michael Katwan. We will help you align your financing plan with your home search so you can move fast and feel prepared.

FAQs

What is the jumbo loan limit for Santa Clara County?

• As of 2024 the high-cost conforming limit for a one-unit home was $1,149,825. Check the current FHFA limits before you shop because they update annually.

Do jumbo loans always have higher rates than conforming?

• Not always. Jumbo pricing depends on investor demand and funding costs, so rates can be slightly higher or competitive depending on market spreads.

Do jumbo loans require PMI if I put less than 20 percent down?

• Standard PMI is uncommon on jumbos. Lenders typically require lower LTVs, higher reserves, second liens, or charge higher rates to offset risk.

Can RSU income help me qualify for a jumbo loan?

• Yes, if you document a stable history of vested and realized RSU income and provide vesting schedules or employer confirmation. Lenders vary in how they count it.

How much in reserves should I plan for with a jumbo?

• Many lenders want 6 to 12 months of mortgage payments in reserves for a primary home, with more for investment properties or complex income profiles.

What jumbo products are common in San Jose?

• You will see 30-year fixed, 15-year fixed, ARMs like 5/6, 7/6, and 10/6, and some interest-only options. The right fit depends on your timeline and risk tolerance.