More Jumbo loan options with less than 20% down payment are becoming available. When our housing bubble burst and we got hit with the credit crunch in 2008, it was hard to find a competitive Jumbo loan, and nearly impossible to find one with less than 20% down. This market has opened up exponentially, so that’s the great news. There are a couple of loan options with a minimum 10% down payment on a Jumbo loan amount (loans above $625,500 in the Bay Area counties).

OPTION 1 – A “combo” 1st & 2nd loan. Some highlights:

  • Structured with a 90% Combined Loan-to-Value ratio
  • Max 1st mortgage is capped at $625,500, and no greater than 80% of the purchase price
  • Max 2nd is $450k
  • Max combined liens cannot exceed $1,075,000
  • Minimum 710 mid-FICO score
  • Single family, condo or townhouse
  • Reserves are minimal (typically 2 months, but it can depend on the loan scenario)

OPTION 2 – Jumbo loan with 10% down and no Mortgage Insurance. Some highlights:

  • The interest rate is high compared to market rates, but without paying for MI (which is often not tax-deductible), it can help get you in the market
  • Max loan amount is $1MM
  • 760 minimum mid-FICO score
  • 24 months reserves required
  • Single family home, condo or townhouse
  • Cannot be a first time homebuyer

The loan structure under either scenario may not be the most ideal, but any time an option opens up in lending for you to make an informed decision on what makes the most sense for you and your goals is a good thing.