Can I Qualify for a Jumbo Loan With Less Than 20% Down in Washington?

Published:
December 19, 2024
Last updated:
December 19, 2024
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Borrowers who purchase expensive homes in the state of Washington often end up relying on jumbo loans for financing. These larger loans usually have stricter criteria, when compared to smaller mortgage amounts.

Today, we’ll address one of the most common questions relating to this subject: “Can I qualify for a jumbo loan in Washington with less than 20% down?”

In some cases, it’s possible to get a jumbo loan with less than 20% down in Washington. But this can vary from one lender to the next.

What Is a Jumbo Loan, Exactly?

A jumbo loan is a mortgage that exceeds the conforming loan limit for the county where the property is located. So let’s talk about where these limits come from.

Mortgage lenders often sell the loans they make through a process that involves the “secondary mortgage market.” This reduces risk for the lender and allows them to turn around and generate more loans.

Here’s a simplified overview of that process:

  1. The lender approves a loan and provides funding for the borrower.
  2. The lender then sells the loan to Fannie Mae or Freddie Mac.
  3. Fannie and Freddie bundle loans into mortgage-backed securities (MBS).
  4. Fannie and Freddie sell the MBS to investors in the secondary market.

But there are size limits for the loans Fannie and Freddie can purchase. These are referred to as “conforming loan limits,” and they can vary by county due to home price variations.

Definition: A jumbo loan is a mortgage that exceeds the loan limits in Washington mentioned above, making it ineligible for purchase by Fannie Mae and Freddie Mac.

For example, the 2025 conforming loan limit for King County, Washington is $1,037,300. So if a Seattle-area home buyer takes out a conventional home loan for more than $1,037,300, they would be using a jumbo mortgage.

What Are Jumbo Loan Requirements in Washington?

To qualify for a jumbo loan, you may need to meet the following criteria:

  • High credit score
  • Low debt-to-income (DTI) ratio
  • Sufficient income and assets

Down Payment Requirements in Washington

Circling back to the question at hand: is it possible to qualify for a jumbo loan in Washington with a down payment less than 20%?

The short answer is yes. In some cases, a borrower taking out a loan that exceeds their county-specific conforming limit might get by with a down payment below 20%.

But there are a lot of variables involved in the process, as well.

For example, some lenders have less of an appetite for risk than other lenders. So they might require larger down payments or higher credit scores.

  • Generally speaking, jumbo loans in Washington require bigger down payments than conforming loans because the lender is exposed to more risk. This is one of the biggest differences between conforming vs. jumbo loans.
  • Some mortgage lenders in Washington might require a down payment of 20% or more for all borrowers seeking a jumbo loan.
  • Other lenders might be more flexible, allowing a down payment in the 10% range for jumbo products.

If you need to minimize your down payment due to a lack of funds, you might want to consider purchasing a home that falls within the conforming loan limit range.

Some conforming loan programs allow for a loan-to-value ratio up to 97%, resulting in a down payment as low as 3%. Both Fannie Mae and Freddie Mac offer such programs.

However, if you need a home loan that exceeds those conforming limits, you’ll probably have to make a larger down payment in the 10% to 20% range.

The VA Loan Exception

Everything mentioned above pertains to conventional home loans in particular.

The “conventional” label is used for mortgage loans that are not insured or guaranteed by the federal government. This distinguishes them from government-backed mortgage programs like the FHA and VA loan programs.

FHA loans do not have a “jumbo” version. They have strict size limits that are often lower than the conforming limits mentioned above. That program is primarily geared toward borrowers seeking a moderately priced home.

The VA loan program, on the other hand, allows eligible home buyers in Washington to buy a home that exceeds the conforming loan limit—and without a down payment.

That’s an important benefit that bears repeating:

Washington military members and veterans who have full VA loan entitlement do not need a down payment for a jumbo loan amount, regardless of the loan amount.

Basically, if you can afford it, the VA will back it.

But this program is limited to military members, veterans, and certain surviving spouses. So not just anyone can qualify for it.

7 Important Points to Take Away From This

This can be a confusing subject for home buyers and mortgage shoppers. So let’s wrap up with a summary. Here are seven points you should take away from this guide.

  1. Jumbo definition: A jumbo loan is a mortgage that exceeds the conforming loan limit for a specific county, making it ineligible for purchase by Fannie Mae or Freddie Mac.
  2. Conforming limits: Conforming loan limits can vary by county. They can also change from one year to the next, usually increasing to keep up with rising home prices.
  3. Down payments: Jumbo mortgages typically require higher down payments than conforming. But some lenders allow down payments as low as 10% for jumbo.
  4. Lender variability: Down payment requirements and other conditions can vary by lender, with some requiring 20% or more and others being more flexible.
  5. Lower down payments: Borrowers with limited funds could qualify for a low down payment (3% – 5%) by staying within the conforming limits for their county.
  6. VA loan benefit: Military members and veterans in Washington could finance the entire home purchase price (with no down payment) by using the VA loan program.

FAQs About Jumbo Loans

  • What’s the minimum credit score for a jumbo loan?

The minimum credit score required for a jumbo loan typically ranges from 700 to 740, depending on the lender and other factors such as your debt-to-income ratio and overall financial profile. Some lenders might have higher requirements, sometimes up to 760.

  • Can I refinance a jumbo loan later with a better down payment?

Yes, you can refinance a jumbo loan later with a better down payment. Refinancing a jumbo loan can help you secure a lower interest rate, better loan terms, or access home equity.

  • Do jumbo loans have higher interest rates?

Historically, jumbo loans had higher interest rates due to the increased risk for lenders. However, in recent years, rates have become more competitive and are often comparable to conforming loans.

  • What are the conforming loan limits for jumbo loans?

The limits vary by county and are adjusted annually. For 2025, the conforming loan limit in most counties in Washington is $806,500, while high-cost areas, such as Seattle, have higher limits, like $1,037,300.

In summary, it’s certainly possible to get a jumbo loan with less than 20% down in Washington. Several loan options are available to make it happen.

Have Questions About Jumbo Loans?

Sammamish Mortgage offers a variety of home loan options in Washington State, including everything covered in this guide. Visit our website to get an instant rate quote, or contact our staff if you have mortgage-related questions or wish to apply for a loan.

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