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What Is A Jumbo Loan In Texas?

A photo of an a-line structured house with floor to ceiling windows that was purchased in Texas using a Jumbo loan product.

So What Is a Jumbo Loan in Texas in 2021?

A jumbo loan is a conventional (not government-insured) mortgage loan that exceeds the conforming size limit for sale to Fannie and Freddie, the two government-sponsored enterprises (GSEs) that buy and sell bundled mortgage loans These limits vary by county. For all counties in Texas, the conforming loan limit is $548,250, meaning any loan amount that is greater than $548,250 is considered a jumbo loan.

The majority of mortgage programs have size restrictions or limitations. This is true for conventional home loans as well as VA and FHA loans. (A conventional loan is one that is not backed or insured by the federal government, while FHA and VA loans are backed by the federal government.) When a loan amount exceeds these size limits, it is referred to as a jumbo loan.

The term “jumbo” is usually applied to conventional mortgage loans. This label means that the loan is too big to be acquired by Freddie Mac or Fannie Mae. A Texas jumbo loan exceeds these size restrictions, and therefore it is considered a “non-conforming” mortgage loan.

What is the specific jumbo loan amount in Texas?

We’ve linked to the 2021 conforming loan limits for single-family homes across Texas

Any loan amounts above the Texas loan limit will be considered a jumbo mortgage.

In general, mortgage qualification criteria can be stricter for jumbo loans simply because of the higher risk associated with the larger loan amount. Borrowers looking for homes that will require larger mortgages should have good credit, stable income, and a manageable level of debt.

How Jumbo Loans Relate to Home Prices

As you might have concluded, jumbo non-conforming loans are mostly used by those purchasing higher-end or “luxury” properties. By design, conforming loan limits are usually set higher than the median home price within a particular county. In theory, this gives homebuyers plenty of properties to choose from without venturing into the jumbo mortgage realm.

In Travis County, Texas, for example, the median home value was around $419,417 in November 2020 according to Zillow. The conforming loan limit for the county is currently $548,250. That’s well below the median value for a house in the area. 

Questions?

If you are thinking about obtaining jumbo financing or have additional questions about what loan products you may qualify for, you can reach our team here, by phone at (855) 855-4491, or by email at jvmteam@jvmlending.com.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167