How to qualify for a jumbo loan

Q: Do jumbo loans require mortgage insurance?

Conventional jumbo loans generally do not, because the required down payment already keeps loan-to-value at or below 80%. That is a meaningful advantage over low-down-payment programs. The trade-off is the larger cash requirement up front, plus the reserves lenders expect you to keep after closing.

Written by Samantha SheltonNMLS 1647301Updated October 2026

Couple approaching a large brick Michigan home of the price range that requires qualifying for a jumbo loan

A jumbo loan is any first mortgage larger than the conforming loan limit for the county the home sits in, and for 2026 that limit is $832,750 on a one-unit property across all 83 Michigan counties, under the Federal Housing Finance Agency’s 2026 conforming loan limit values. To clear that bar, jumbo lenders generally want a 700 or higher credit score, 10% to 20% down, a debt-to-income ratio at or below 43%, and 6 to 12 months of mortgage payments still in the bank after you close.

The tighter standards are structural, not personal. Because the loan exceeds the limit, Fannie Mae and Freddie Mac can’t buy it, so whoever carries the risk writes the guidelines. Which is why two lenders can read the same file and answer differently.

Learn how to qualify for a jumbo loan, including the credit score, down payment, DTI, and reserve levels lenders actually apply, and why the same purchase price can be conforming one year and jumbo the next. Still comparing programs? Start with our Loan Types & Programs guide.

Key takeaways:

In Michigan, the jumbo line is $832,750 for 2026: Every Michigan county carries the baseline one-unit conforming limit, so any first mortgage above $832,750 on a Michigan single-family home is jumbo.
Credit and cash carry the file: Jumbo lenders typically look for a 700 to 720 credit score and 6 to 12 months of full principal, interest, taxes, and insurance payments in reserves after closing.
Your down payment decides which side of the line you land on: On a $900,000 Michigan purchase, $67,250 down about 7.5%, keeps the loan conforming at $832,750, while 5% down makes it an $855,000 jumbo.

What is a jumbo loan?

A jumbo loan is a mortgage that exceeds the conforming loan limit FHFA sets each year for the county and property type, $832,750 for a one-unit home in most of the country in 2026. “Jumbo” isn’t a legal category or a government program. It’s the industry’s name for everything above the line, which is why the line, not the dollar amount, is the part worth memorizing.

That line moves every year by rule. The Housing and Economic Recovery Act requires FHFA to adjust the baseline annually by the change in average U.S. home prices; prices rose 3.26% between the third quarters of 2024 and 2025, so the 2026 baseline rose by the same percentage, up $26,250. A separate rule sets the high-cost ceiling at 150% of the baseline, putting it at $1,249,125 for 2026. Look up any county on FHFA’s conforming loan limits by county, and check it fresh each January.

Two clarifications save real confusion. Above the baseline isn’t automatically jumbo: in roughly 160 of the 3,200-plus counties on FHFA’s 2026 list the limit runs higher, and Fannie Mae calls loans using them high-balance, still conforming, still saleable. Michigan has none. And jumbo is one branch of non-conforming, not the whole tree: loans also fail to conform on documentation, property type, or credit profile, as our guide to non-conforming loans and Jumbo & Non-QM hub explain. Investopedia’s jumbo loan overview is a useful second read.

Because the baseline climbs with home prices, a balance that was jumbo at closing can fall under the limit later, a common reason refinancing a jumbo loan into a conforming loan pays off.

Jumbo loan requirements at a glance

Here’s what jumbo lenders typically ask for. These are investor guidelines, not government rules, the center of a range, not a cutoff.

Requirement	Typical to qualify	To reach the best pricing
Credit score	700	720 to 760 or higher
Down payment	10% to 20%	20% to 30%
Loan-to-value cap	80% to 90%	70% to 80%
Maximum DTI	43%	36% or lower
Cash reserves after closing	6 months of PITI	12 months or more of PITI

Credit score requirements for a jumbo loan

Most jumbo investors set a hard floor at 700, and the pricing tiers that matter start at 720 and improve again around 760. A borrower at 690 isn’t out of options, but the list narrows fast, lender by lender, because each investor publishes its own floor.

The gap with conforming lending has widened here. Fannie Mae removed the 620 minimum representative credit score from Desktop Underwriter for loan casefiles created on or after November 16, 2025, replacing the cutoff with the model’s own credit risk assessment. Jumbo investors didn’t follow, because a flat number is easier to enforce on a loan nobody else will buy. Score alone isn’t the whole picture: underwriters read the report, and payment history and amounts owed are the heaviest inputs into what makes up your credit score.

How much do you need to put down on a jumbo loan?

Plan on 20%, because most jumbo programs cap loan-to-value at 80%. Some lenders go to 90%, 10% down, for a borrower with a high score, low DTI, and deep reserves. Each step down in LTV generally improves pricing, since LTV drives the lender’s loss exposure.

Run the math backward and the down payment tells you where jumbo territory starts. At 20% down, a Michigan buyer doesn’t reach the $832,750 line until the price passes about $1,040,938. At 10% down, it arrives around $925,278.¹

On a $900,000 Michigan purchase, $67,250 down about 7.5%, produces a loan of exactly $832,750, the largest conforming loan in the state. Drop to 5% down and the loan becomes $855,000, just $22,250 over the line, and the file leaves the conforming world entirely. Jumbo loans above 90% LTV usually land with a bank that keeps them on its own books; our explainer on what a portfolio loan is covers why those guidelines vary shop to shop.

Conforming vs. jumbo: the same $900,000 purchase, two ways

Nothing about the house changes here. Only the loan amount does, and with it, who writes the rulebook.

Underwriting factor	Conforming: $832,750 loan (7.5% down)	Jumbo: $855,000 loan (5% down)
Who sets the guidelines	Fannie Mae or Freddie Mac, uniform nationwide	The bank or investor holding the loan; different at every shop
How the file is reviewed	Automated underwriting, manual as a fallback	Frequently manual, full-file read
Credit score gate	No fixed Desktop Underwriter minimum since November 16, 2025	A published floor, commonly 700
Maximum DTI	Up to 50% through Desktop Underwriter	Commonly 43%, sometimes 45% to 50% with reserves
Mortgage insurance	Required above 80% LTV	Rarely offered; most programs stop at 80% LTV
Reserves after closing	Often none on a primary residence	6 to 12 months of PITI, verified

What DTI do jumbo lenders allow?

Most jumbo investors cap debt-to-income at 43%, and a subset stretches to 45% to 50% when reserves, score, and equity are all strong. To find yours, divide your total monthly debt payments, the new mortgage plus car loans, student loans, minimum card payments, alimony, and child support, by your gross monthly income. Our guide to the debt-to-income (DTI) ratio and how it’s calculated covers what counts.

One myth deserves a stake through it: 43% is a lender overlay, not a federal requirement. The Consumer Financial Protection Bureau removed the 43% DTI limit from the General Qualified Mortgage definition and replaced it with a price-based test. The loan’s APR must exceed the average prime offer rate for a comparable transaction by less than 2.25 percentage points, and that revised definition became the only General QM option for applications received on or after October 1, 2022. A 43% quote is that lender’s business decision. The next one’s number will differ. Exactly the kind of spread a broker exists to find.

How much do jumbo lenders want in reserves?

Six to twelve months of full principal, interest, taxes, and insurance, verified as still sitting in your accounts after the down payment and closing costs are paid. On a $6,000 monthly payment, that’s roughly $36,000 to $72,000 left over.

Counts in full: Checking, savings, and money market balances, plus stocks or bonds you can liquidate.
Counts at a discount: Retirement accounts, since penalties and taxes shrink what you could actually access.
Counts for nothing: Unvested equity compensation, undocumented funds, and gift money earmarked for the down payment.
Pushes the requirement higher: Second homes, investment property, multiple financed properties, and loan amounts well past the limit.

Reserves are the most fixable piece of a jumbo file, unlike credit history, they respond to a few months of saving. Our jumbo loan tips cover how to stage and season those funds.

How jumbo underwriting actually differs

Expect a manual, document-heavy review: two years of tax returns and W-2s or 1099s, recent pay stubs, two months of statements on every account you’re using, written explanations for large deposits, and verbal verification of employment near closing. Some investors order a second appraisal on larger loans.

Non-QM is not subprime, and it is not unregulated: A lender making a non-qualified mortgage still must reach a reasonable, good-faith determination that you can repay, under Regulation Z’s ability-to-repay rule at 12 CFR § 1026.43(c), weighing eight specific factors, including income or assets, debts, DTI or residual income, and credit history, each verified against reliable third-party records.
Alternative documentation is not “no doc”: Bank statement, asset depletion, and DSCR programs all document repayment capacity from deposits, assets, or property cash flow rather than a W-2. Pre-2008 stated-income lending is gone.
Interest-only jumbo loans exist, but can’t be Qualified Mortgages: The QM definition requires substantially equal periodic payments, no interest-only period, no negative amortization, no balloon payment, a term of 30 years or less, and points and fees at or under 3% on larger loans. Falling outside QM doesn’t make a loan unavailable or improper; it costs the lender the QM presumption of compliance, so it underwrites you harder.

What if you don’t qualify for a jumbo loan?

Three moves usually beat waiting a year.

Get under the line: Holding the first mortgage to $832,750 or less returns you to conforming pricing and far more lender competition, through a bigger down payment, or a piggyback: a conforming first plus a home equity second.
Use VA entitlement if you have it: For loans closed on or after January 1, 2020, VA county loan limits no longer apply to veterans with full entitlement, so a qualified veteran can finance above $832,750 with no jumbo down payment. County limits still apply with partial entitlement.²
Know FHA’s ceiling first: FHA sets its one-unit floor at 65% of the conforming baseline and its ceiling at 150%, $541,287 and $1,249,125 for 2026 under HUD Mortgagee Letter 2025-23. Every county limit falls between them, so check yours in HUD’s FHA Mortgage Limits lookup before counting on it.³

How the mortgage interest deduction works on a jumbo loan

The tax detail jumbo borrowers most often miss: the home mortgage interest deduction is capped by loan size. For debt incurred after December 15, 2017, you may deduct interest on up to $750,000 of home acquisition debt, or $375,000 if married filing separately; debt taken on after October 13, 1987 and before December 16, 2017 keeps the older $1 million and $500,000 limits. The lower cap, once scheduled to expire, was made permanent under the One Big Beautiful Bill.⁴

On the $855,000 jumbo above, interest attributable to roughly $105,000 of the balance falls outside the deduction. That doesn’t change whether you qualify, it changes the after-tax cost, worth modeling with your tax preparer.

What Michigan buyers should know

Michigan is a clean state for this question: there’s no middle tier to sort out.

All 83 Michigan counties sit at the baseline: FHFA’s 2026 county list puts every one at $832,750 for one unit and $1,066,250 for two. No Michigan county is high-cost, so there’s no high-balance option, you’re conforming up to $832,750 and jumbo above it, statewide.
Jumbo starts near a $1.04 million purchase price at 20% down: Ann Arbor, Birmingham, Bloomfield Hills, Northville, and the waterfront markets around Traverse City are where Michigan prices cross that line most often. Elsewhere, buyers get there mainly by putting less down.
Budget for property tax uncapping: Under MCL 211.27a(3), taxable value uncaps to state equalized value in the year after a transfer of ownership. On a long-held, high-priced home the bill you inherit can run far above the seller’s, inflating your PITI, your DTI, and the reserves you need. Ask which tax figure the lender used to build your escrow.
File your Principal Residence Exemption: A PRE exempts your principal residence from up to 18 mills of local school operating tax under MCL 211.7cc on a jumbo-sized taxable value, one of the largest line items you control. It takes an affidavit filed with your tax collecting unit.

How do you choose a lender for a jumbo loan?

Jumbo guidelines belong to whoever holds the loan, so two jumbo lenders can land far apart on the same file. Compare them on reserves, documentation, property rules and overlays before you compare price. The answers decide whether the price is even available to you.

Ask the lender	Why it matters
How many months of reserves do you require, and which accounts count at full value?	Retirement and brokerage accounts are often counted at a discount, and each lender sets its own discount.
Is it full documentation only, or do you accept bank statements or asset-based income?	A business owner or a retiree may fit one lender’s documentation rules and not another’s.
Will this loan amount need a second appraisal?	A second report adds cost and time, and the lower value usually controls.
Which properties do you limit?	Condos, large acreage, waterfront and homes with outbuildings can fall outside one lender’s box and inside another’s.
Do your score and debt-to-income limits tighten above a certain loan size?	Many jumbo programs tier their rules by loan amount, so the file that works at one size may not work at the next.
Can we stay under the conforming limit instead?	A larger down payment or a second mortgage behind a conforming first can bring the file back under the line.

Choosing a jumbo lender in Michigan

Every Michigan county uses the same 2026 conforming limit, $832,750 for a one-unit home. A first mortgage above that is jumbo anywhere in the state, whether the house is in Birmingham or on a northern lake. Jumbo depends on the loan amount, not the price, so your down payment decides which side of the line you are on. What changes from house to house is the property: lakefront homes, acreage and older estates are where lender property rules tend to show up.

Because Align is a broker, Samantha can put these answers side by side from one application, instead of learning one lender’s rules at a time. Align places jumbo loans through multiple wholesale lenders, and she handles your file herself. That way the reserve and appraisal questions can be answered before you sign a purchase agreement, not during underwriting. Contact Align Lending.

How Align handles jumbo and non-QM loans

This is where lenders differ most. Bank statement loans, DSCR loans for rentals and jumbo loans each have guidelines that change from one lender to the next, so the lender matters as much as the loan.

Samantha takes one application to multiple wholesale lenders and matches your file to the one whose rules fit how you actually earn. Self-employed is different, not harder. The difference is documentation.

Review a self-employed plan Jumbo loans in Michigan

FAQ: Qualifying for a jumbo loan

Here are answers to common questions about qualifying for a jumbo loan.

What credit score do you need for a jumbo loan?

Most jumbo lenders set a floor at 700, and many price their best terms starting at 720 or above. Because jumbo loans stay on the lender’s books rather than being sold to Fannie Mae or Freddie Mac, standards are stricter and vary noticeably between lenders. A borrower at 690 may be declined by one and approved by another. Our guide to what counts as a good credit score to buy a house shows where you stand.

How much down payment do you need for a jumbo loan?

Twenty percent is the standard expectation, though some lenders approve 10% down for borrowers with excellent credit, deep reserves, and low debt-to-income ratios. Larger down payments typically improve your rate because they cut the lender’s loan-to-value exposure. Most jumbo programs cap loan-to-value at 80%, which is why 20% is so common, see how the loan-to-value ratio works.

Do jumbo loans require mortgage insurance?

Generally no. The down payment most jumbo programs require already keeps loan-to-value at or below 80%, the threshold above which mortgage insurance normally applies. That’s a real advantage over low-down-payment programs. The trade-off is the larger cash requirement up front, plus the reserves lenders expect after closing. Our guide to non-conforming loans compares how that trade-off shifts across products.

How much cash reserves do jumbo lenders require?

Typically 6 to 12 months of full principal, interest, taxes, and insurance payments, verified in your accounts after your down payment and closing costs are paid. Retirement accounts often count at a discounted value because of withdrawal penalties. On a $6,000 monthly payment, that’s roughly $36,000 to $72,000 still in the bank at closing, our jumbo loan tips cover how to document those funds.

The bottom line on qualifying for a jumbo loan

A jumbo loan is any first mortgage above the county conforming loan limit, $832,750 on a one-unit property in every Michigan county for 2026, and qualifying generally takes a credit score of 700 or higher, 10% to 20% down, a DTI at or below 43%, and 6 to 12 months of mortgage payments in reserves after closing. None of those numbers come from a government rulebook. They’re set by whoever will hold the loan, which is why the score floor, the LTV cap, and the reserve requirement can change at the next lender you call.

If you’re ready to find out which jumbo lender’s guidelines fit your file, talk to Align Lending, we’ll shop your scenario across our wholesale lender network and show you the overlays and the pricing side by side. Call 248-506-5727 or start online today.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your rate, terms, down payment, and reserve requirements will depend on your application, the lender’s guidelines, and market conditions. Return to text.

2. Align Lending works with VA-approved lenders and is not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. VA entitlement, guaranty calculations, and eligibility are determined by VA; individual lenders set their own maximum loan amounts. Return to text.

3. Align Lending is not acting on behalf of or at the direction of FHA or HUD. FHA forward mortgage limits are set annually by HUD and vary by county and property type; confirm your county’s current limit before relying on it. Return to text.

4. This is general information, not tax advice. Whether mortgage interest is deductible depends on your individual circumstances, on whether you itemize, and on how the debt was used. Consult a qualified tax professional about your situation. Return to text.

Figures current as of August 2026; verify current limits with the linked source before relying on them.

Sources: 2026 baseline conforming loan limit value of $832,750 for one-unit properties, an increase of $26,250 over 2025; the 3.26% average U.S. home price increase between the third quarters of 2024 and 2025; and the 2026 ceiling of $1,249,125, equal to 150 percent of the baseline, Federal Housing Finance Agency, “FHFA Announces Conforming Loan Limit Values for 2026” (November 2025). Michigan county limits of $832,750 for one unit and $1,066,250 for two units in all 83 counties, and the count of counties carrying limits above the baseline, FHFA, 2026 Conforming Loan Limit Values county list. Annual adjustment of the baseline to the change in average U.S. home price, Housing and Economic Recovery Act of 2008. Definition of high-balance mortgage loans as loans subject to high-cost area limits, Fannie Mae Selling Guide B5-1-01. Removal of the 620 minimum representative credit score in Desktop Underwriter for loan casefiles created on or after November 16, 2025, and the maximum DTI of 50% through Desktop Underwriter (36% for manually underwritten loans, up to 45% with credit score and reserve requirements), Fannie Mae, Desktop Underwriter Credit Risk Assessment Updates and Selling Guide B3-6-02. Removal of the General QM 43% DTI limit and Appendix Q, replacement with a price-based threshold of less than 2.25 percentage points over the average prime offer rate, and the October 1, 2022 mandatory compliance date, Consumer Financial Protection Bureau, General QM Loan Definition Final Rule (December 2020). Ability-to-repay standard and the eight required underwriting factors applicable to non-qualified mortgages, 12 CFR § 1026.43(c). Qualified mortgage product-feature limits on negative amortization, interest-only payments, balloon payments, loan terms over 30 years, and points and fees above 3% of the total loan amount, 12 CFR § 1026.43(e)(2) and (e)(3). Elimination of VA county loan limits for veterans with full entitlement for loans closed on or after January 1, 2020, Blue Water Navy Vietnam Veterans Act of 2019; U.S. Department of Veterans Affairs, VA home loan entitlement and limits. FHA 2026 one-unit floor of $541,287 and ceiling of $1,249,125, the 65% floor and 150% ceiling rules, and the January 1, 2026 case-number effective date, HUD Mortgagee Letter 2025-23 and HUD No. 25-145. Home acquisition debt limits of $750,000 and $375,000 for debt incurred after December 15, 2017, the grandfathered $1 million and $500,000 limits, and the permanence of the lower limit, IRS Publication 936 and IRS guidance on the One Big Beautiful Bill. Uncapping of taxable value to state equalized value in the year following a transfer of ownership, MCL 211.27a(3). Principal residence exemption from up to 18 mills of local school operating tax, MCL 211.7cc.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Loan limits, program rules, lender guidelines, and tax provisions change and vary by county, property type, and investor; confirm current figures with the linked sources and your Loan Estimate, and consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.