Jumbo Loan Basics For San Francisco Buyers
Buying in Pacific Heights comes with big views and equally big numbers. If you’re eyeing a home north of California Street or along the Broadway blocks, there’s a good chance you’ll need a jumbo loan. That can feel overwhelming if you’re new to high-balance financing. The good news: once you understand the basics, you can plan a strong path to pre-approval and write a competitive offer with confidence. Let’s dive in.
In mortgage language, conforming loans follow Fannie Mae and Freddie Mac size limits and rules. Anything that exceeds those limits is non-conforming, also called jumbo.
For 2024, the baseline conforming limit is $766,550. In high-cost areas like San Francisco, the one-unit ceiling is $1,149,825. Any loan amount above the county ceiling is a jumbo loan. In Pacific Heights, where many homes list well above that range, jumbo and even super-jumbo financing is common.
Some lenders use the term super-jumbo for loans above about $2 million to $3 million. There is no single industry definition. The label matters because underwriting and pricing can tighten as loan size rises.
Jumbo loans come from private lenders that set their own rules. Expect tighter reviews and more documentation than a standard conforming mortgage.
Many jumbo programs start around a 700 minimum credit score. For the best pricing and higher loan-to-value options, a 740+ score is common. Lenders also look closely at your full credit history, not just the score.
Typical jumbo down payments range from 10% to 20%. The most common break point for stronger pricing and fewer add-ons is 20% or more down. For super-jumbo loans, lenders often ask for 20% to 30%+, depending on your profile.
Private mortgage insurance is less standardized for jumbos. Some lenders offer it for higher LTVs, but many prefer larger down payments to avoid it.
Plan to show more cash on hand after closing than you would with a conforming loan. Jumbo loans often require 6 to 12 months of principal, interest, taxes, and insurance in reserves. Super-jumbos can require 12 to 24 months, especially if you are self-employed or pushing a higher LTV.
Many lenders prefer a debt-to-income ratio under 43% to 45%. Some may stretch to 50% with strong compensating factors, like large reserves and stable income. Expect lenders to use conservative payment assumptions when they calculate DTI.
Be ready to document everything. Most lenders want two years of tax returns, W-2s and recent pay stubs, and a few months of bank and investment statements. Self-employed buyers should expect detailed reviews of business income and expenses. Alternative programs like asset depletion or bank-statement loans exist but usually come with lower LTVs or higher rates.
Recent job changes, large deposits, and asset transfers need clear documentation. Lenders often require seasoning of funds for 60 to 90 days or detailed paper trails for gifts and asset sales.
Jumbo rates move with the broader bond market and can be higher or similar to conforming rates depending on investor demand. Pricing varies widely between lenders. It pays to compare offers.
Buying in Pacific Heights can introduce a few extra checkpoints that impact your approval, timeline, and offer strategy.
Beyond single-family homes, you’ll see luxury condos and occasional co-ops. Condo financing can require HOA and project approval. Lenders often check owner-occupancy levels, budget health, insurance, and whether the building includes commercial space. If a building does not meet a lender’s condo standards, your loan options may shrink.
HOA dues and any special assessments count toward your housing expense. High monthly dues can increase your DTI, which might reduce your maximum loan amount or increase reserve requirements. Get the HOA budget, meeting minutes, and disclosures early so your lender can start their review.
In California, annual property taxes are generally about 1% of assessed value plus local assessments, and the assessed value typically resets to the purchase price at closing. San Francisco also charges a real property transfer tax that increases with sale price. Your closing cost estimate should include transfer tax, title and escrow fees, recording charges, and any lender points or origination fees.
High-end and unique homes can be tricky to appraise. Lenders may require an appraiser with luxury market experience. If the appraisal comes in low, it can affect your approval or require renegotiation. Plan time for appraisal scheduling and potential follow-up.
Cash is king in multiple-offer situations, but financed offers can still win. Sellers often prefer buyers who already completed in-depth pre-approval, show strong reserves, and can close on a tight timeline. Larger earnest money deposits and shorter contingency periods can also help, if you are comfortable with the risk.
Use this workflow to prepare before you start touring in Pacific Heights.
Typical jumbo timelines range from 2 to 6 weeks from application to clear-to-close. If most conditions are satisfied up front, some buyers can close in about two to three weeks.
For loans originated after December 15, 2017, the federal mortgage interest deduction is generally limited to interest on up to $750,000 of acquisition debt for married filing jointly. Your personal situation may differ. Speak with a tax professional for guidance.
Jumbo financing is normal in Pacific Heights. If you plan ahead, gather complete documentation, and secure a strong pre-approval, you can compete effectively for the right home. The key is to match your loan strategy to the property type, HOA details, and your comfort with contingencies and timelines.
If you want a clear plan for your search and offer strategy in San Francisco, reach out. Janeen Anderson will guide you from pre-approval to closing with neighborhood insight and calm, hands-on support.