Dreaming of a home in a high-cost area but worried about loan limits? An FHA jumbo loan could be the answer. FHA loans offer an alternative to conventional loans, which often have stricter qualification standards. With an FHA jumbo loan, borrowers can access higher loan amounts while benefiting from low down payments and flexible credit requirements.
In a nutshell
- FHA jumbo loans are bigger than the standard FHA loan limit of $524,225 for single-family homes in most areas in 2025.
- The max loan limit for FHA jumbo loans is $1,209,750 for a single-family home in 2025.
- The biggest downside of getting an FHA jumbo loan is that it requires a higher mortgage insurance fee.
Available Property Types for FHA Jumbo Loans
FHA jumbo loans are available to finance the following property types:
- Single-family homes
- Multi-unit properties (up to four units)
- FHA-approved condos
- Manufactured homes (must be on a permanent foundation and meet FHA guidelines)
These loans cannot be used for second homes or investment properties—the borrower must occupy the property as their primary residence.
FHA Jumbo Loan Limits
FHA loan limits exist to ensure the program serves its intended audience, borrowers who might struggle to qualify for conventional loans due to income limitations or lower credit scores. These limits set by the Department of Housing and Urban Development (HUD) vary by county based on median home prices.
The limits prevent excessive risk while allowing flexibility for buyers purchasing a home in higher-cost areas. FHA loan limits are typically lower than those of conventional loans backed by Fannie Mae and Freddie Mac. However, in some high-cost regions where home prices are significantly higher, the FHA allows for increased limits to accommodate the market.
2025 FHA Jumbo Limits
FHA loan limits vary depending on the location and type of property being financed. In low-cost areas, the loan floor for a single-family home is set at $524,225, while in high-cost areas, the ceiling reaches up to $1,209,750. FHA jumbo loan limits are even higher for those looking to purchase multi-unit properties.
Here are the jumbo loan limits in high-cost areas for multi-unit properties:
$1,548,975 for two units
$1,872,225 for three units
$2,326,875 for four units
These expanded limits allow borrowers to buy multi-unit properties while still benefiting from FHA’s favorable loan terms.
FHA Jumbo Loan Requirements
Qualifying for an FHA jumbo loan involves meeting many of the exact same requirements of a standard FHA loan but with some added scrutiny due to larger loan amounts.
Overall, here are the benchmarks lenders typically look for:
A credit score of 580 is required for a 3.5% down payment. Some lenders may set higher minimums for FHA jumbo loans.
Borrowers typically need a DTI of 43% or lower, though exceptions may be made for strong compensating factors.
FHA jumbo loans require at least a 3.5% down payment.
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Due to the larger loan amounts, some FHA jumbo loans require manual underwriting, meaning lenders conduct a more thorough financial review.
The loan must be used for a primary residence and cannot be applied to investment properties or second homes.
Borrowers must pay both an upfront and an annual mortgage insurance premium (MIP). FHA jumbo loans typically have the highest annual MIP rates, increasing long-term costs.
FHA Jumbo Loan MIP Requirements
The upfront mortgage insurance premium (MIP) rate is 1.75% of the loan amount, which can be financed or paid in full at closing. The upfront MIP is the same for jumbo and regular FHA loans, while the annual MIP varies by loan size and amount paid at closing.
The length of the annual MIP also depends on the amount you put down at closing. If you provide a down payment of 10% or more at closing, your annual MIP will be canceled after 11 years; otherwise, it will last the life of the loan unless you refinance into a different loan type.
Here’s a look at the annual MIP Rates for jumbo loans in 2025:
MIP for FHA Jumbo Loans ≤ 15 Years
| Loan Length | Down Payment Amount | Annual MIP | Length Payments |
|---|---|---|---|
| 15 years or less | Less than 10% | 0.65% | Entire loan |
| 15 years or less | 10% to 21.99% | 0.40% | 11 years |
| 15 years or less | 22% or more | 0.15% | 11 years |
MIP for FHA Jumbo Loans 15 to 30 Years
| Loan Length | Down Payment Amount | Annual MIP | Length of Payments |
|---|---|---|---|
| 15 to 30 years | less than 5% | 0.75% | Entire loan |
| 15 to 30 years | 5% to 10% | 0.70% | Entire loan |
| 15 to 30 years | 10% or more | 0.70% | 11 years |
Pros & Cons of FHA Jumbo Loans
With lower down payment options and more lenient credit criteria, FHA jumbo loans make homeownership more attainable in high-cost areas. However, they come with some trade-offs, including higher mortgage insurance premiums and stricter underwriting processes.
Below is a comprehensive comparison of FHA jumbo loans' key advantages and disadvantages.
| Pros | Cons | |
|---|---|---|
| Low Down Payment vs. Higher MIP | FHA jumbo loans require as little as 3.5% down, making them more accessible than conventional jumbo loans. | FHA jumbo loans have the highest MIP rates, increasing the overall cost of the loan over time. |
| Flexible Credit Requirements vs. Stricter Underwriting | Borrowers with lower credit scores can qualify more easily for a jumbo loan than a conventional loan. | Due to the larger loan amounts, lenders may require manual underwriting and additional financial documentation. |
| Competitive Interest Rates vs. Primary Residency Requirement | FHA loans often have lower interest rates compared to conventional loans, which helps offset some of the costs of MIP. | FHA jumbo loans cannot be used for vacation homes or investment properties. |
| Option for Multi-Unit Homes vs. Varying Loan Limits | Borrowers can finance properties with up to four units, allowing for potential rental income to help cover mortgage costs. | Borrowers in lower-cost areas may not qualify for an FHA jumbo loan, even if home prices in their area are high relative to their income. |
While FHA jumbo loans can pave the way to homeownership in high-cost markets, where property values are elevated like never before, it's essential to carefully evaluate both the benefits and limitations. Understanding the higher mortgage insurance costs and stricter underwriting processes can help determine if this type of loan best fits your financial situation.
Dan Bartelt has over 16 years of mortgage industry experience. He’s held roles as a loan officer and processor and has spent the past 8 years as an underwriter. Dan views underwriting as solving a puzzle—piecing together details to create a compelling loan story.
