Once your loan balance crosses the FHFA conforming loan limit, you leave the Fannie/Freddie ecosystem entirely. The 2026 baseline conforming limit is around $806,500 for one-unit homes nationally, with a high-cost-area ceiling near $1.21M in counties like Santa Clara, San Mateo, Los Angeles, New York, and similar Tier-1 metros — check the current year’s FHFA limits before relying on any specific number. Above those thresholds you are in Jumbo territory, and the rules change in ways that matter more than the headline rate:
Jumbo loans are not sold to Fannie or Freddie. They sit on the originating bank’s own balance sheet (the “portfolio”) or are placed into a private-label securitization. The lender is taking the credit risk, so the lender writes the rules. Private banks — JPMorgan, Bank of America Private Bank, First Republic’s successor franchises, Morgan Stanley, Goldman — price these loans against the rest of the relationship: assets under management, deposits, brokerage balances. Bring more, pay less.
Portfolio lenders generally do not require PMI even at loan-to-value ratios above 80%. What they substitute is a post-closing liquidity reserve requirement: a stated amount of PITI (principal, interest, taxes, and insurance) that must remain in liquid or near-liquid accounts after closing, untouched and verifiable. Typical bands: 6 months of PITI on a modest Jumbo, 12 months as balances rise, and 18–24 months once loan size crosses roughly $2–3 million. Verify the specific number in writing with the lender before counting on it; banks tighten these in any credit contraction.
If your W-2 income is light relative to the loan you want (common for early-retirees, equity-heavy founders, or anyone living on portfolio distributions), Jumbo lenders will often qualify you on an asset-depletion basis: a stated fraction of your liquid investable assets, amortized over the loan term, counts as imputed monthly income for DTI purposes. The fractions vary — often 70% of brokerage and 100% of cash, divided by 240 months for a 20-year amortization, or by the remaining mortgage term — and again are negotiated against the relationship.
On a Jumbo of $1M+, the rate spread between a cold-call retail quote and a relationship-priced quote from a private bank where you already custody seven-plus figures is routinely 25–75 basis points. Over a 10-year hold, that is real money. Get a quote from your existing private-banking relationship before shopping elsewhere; if you don’t have one and you’re financing a large purchase, opening the relationship may pay for itself in the spread alone.
Jumbo underwriters look harder. Expect two years of tax returns (often three), full schedules including K-1s, statements for every account showing reserve compliance, signed CPA letters for self-employed income, and an explanation for any irregular cash movement. Plan the document-gathering early — the timeline is the constraint, not the rate.
The right way to think about Jumbo underwriting: the bank is making a relationship-based credit decision dressed up as a real-estate loan. Your job is to make the relationship part work for you on price, while keeping enough genuine liquidity outside the reserve requirement that the loan does not become the thing that constrains the rest of your financial life.