- Define the current Conforming Loan Limit
- State typical jumbo FICO and reserve requirements
- Explain reserve months and how they are counted
- Identify jumbo overlays on DTI and appraisals
Conforming vs. Jumbo
Each year the FHFA sets a Conforming Loan Limit. Loans above the limit are jumbo and not sold to Fannie/Freddie. Most jumbo lenders require 700+ FICO, 6–12 months of PITI reserves, and DTI under 43%.
Reserves
Reserves are liquid assets remaining after closing, measured in months of full mortgage payment (PITIA). Stocks and retirement count at 60–70% of value. Reserves are the #1 jumbo overlay after FICO.
Appraisal Standards
Many jumbo programs require two full appraisals over a certain loan amount, with the lower value used for LTV. Build extra time into the contract.
- Jumbo = above the annual Conforming Loan Limit.
- 700+ FICO and 6–12 months reserves are typical.
- Two appraisals may be required on large loans.
Module 16 Exam — 5 questions
Pick the best answer for each question. Pass with 80% or higher to mark this module complete.
- 1.
A jumbo loan is one that:
- 2.
Typical jumbo FICO minimum is:
- 3.
Jumbo reserves are usually:
- 4.
Retirement accounts in jumbo reserves are counted at:
- 5.
High-balance jumbo loans often require:
0 of 5 answered