Everything is bigger in Texas, and many want their homes to be bigger, too. If you’re looking for a sumptuous ranch home, a Texas jumbo loan is exactly what you need!
These mortgages go above the conforming loan limit (sometimes up to $3 million) and allow you to outcompete other buyers who may have their eye on your dream home. However, jumbo home loans have stricter requirements—and higher risk.
Today, we’ll explore the Texas jumbo loan limits and what you need to qualify for these large loans so you’re ready to talk to an F5 Mortgage jumbo loans officer.
Understanding Jumbo Loans
Jumbo loans are conventional loans, meaning that—unlike FHA or VA loans—they are not backed by the government.
However, jumbo loans differ from the typical conventional loans that you can get from most lenders because they go beyond conforming loan limits set by the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac.
Loan limits are set at the county level, meaning more expensive markets will have higher loan limits. There are also different limits for single-unit properties versus multi-unit properties.
Certain government-backed loans have lower limits than conforming loans; for example, FHA loan limits in Andrews County were $498,257 as of 2024, while a conforming mortgage can be as high as $766,550.
The two government-sponsored enterprises, Fannie Mae and Freddie Mac, can purchase and sell private loans that adhere to these limits to private investors as mortgage-backed securities (MBS).
These conforming mortgage loans are safer because if a borrower defaults on their mortgage payments, the lender can bundle it with other mortgages and receive liquid funds to underwrite more loans.
Conforming Loan Limits vs. Jumbo Loan Limits
A jumbo loan is anything above conforming loan limits. In essence, the limits set by the Federal Housing Finance Agency are the “floor” for a jumbo loan in that county, and the “ceiling” is selected by the jumbo mortgage lender.
For example, as of 2024, the conforming loan limit in Bailey County, Texas, is $766,550, meaning that loans of $766,551 or more are considered jumbo mortgages.
The conventional loan limit in Texas for one-unit properties is $766,550, but some high-value areas, such as those near Dallas, Houston, and Austin, have limits of $977,500 or $1,149,825.
Jumbo Loan Limit Texas
F5 Mortgage jumbo loans can be up to $3 million, though your specific jumbo loan limit will depend on your financial situation and the general home prices in your area.
If you’re ready to explore your options for jumbo home loans, get in touch with a loan officer from our team to discuss the jumbo loan amount you may be able to secure.
Qualifying for a Jumbo Loan in Texas
Jumbo loan qualification requirements are higher than for other conventional mortgages due to the fact that these are riskier than conforming loans. Due to these stricter underwriting standards, lenders require higher credit scores, down payments, and cash reserves.
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Credit Score Requirements
Those who want larger loan amounts also need a higher credit score. For a non-conforming loan, expect a minimum FICO score of 680 to qualify—though many lenders will want even higher than this score, especially if you are buying investment properties.
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Down Payment Requirements
For a primary residence, you will need at least a 10% down payment in addition to closing costs. For an investment property, your mortgage lender may require 20% or more. Visit our page to learn more about the Texas down payment assistance programs.
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Debt-to-Income Ratio
Your mortgage broker or lender wants to see that you can finance properties, meaning you need minimal debts that might cause insolvency and as small a debt-to-income ratio as possible. The maximum amount for your debt-to-income ratio is typically 43%.
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Income Verification
To get a Texas jumbo loan, you need to have a stable income, which will be proven through 60 days of bank statements and at least one year of tax returns. If you are self-employed, you may need to show two years of 1099s and W2s.
Benefits of Jumbo Loans
In a supercharged housing market, jumbo loans are your best way to compete with other buyers. Many homes in Texas are being bought in cash, but with a jumbo loan, you can soar past these prices and provide a highly attractive offer to any seller.
Additionally, a Texas jumbo loan allows you to purchase the home of your dreams without having to juggle multiple mortgages. Having more than one loan on a home means additional stress: you have to avoid becoming delinquent on one mortgage, all the while dealing with conflicting interest rates.
With jumbo loans, you gain access to one interest rate and streamline your finances, ensuring that you remain on top of your budget.
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Competitive Interest Rates
Jumbo rates are better than ever as more lenders seek these high-value clients. Whereas before, jumbo loan interest rates were several points higher than smaller conventional options, high home prices have driven more consumers to seek out these loans, which has led to better rates for borrowers.
We offer competitive rates on all our products, including Texas jumbo loans. In some instances, you can get loans that are only half a point higher than a smaller loan. As another plus, interest can be tax deductible, helping ease your tax burden.
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Flexible Loan Options (Fixed vs. Adjustable)
We offer both fixed- and adjustable-rate mortgages, depending on your needs and financial goals.
If you intend to stay in your home for a long time, a fixed-rate jumbo loan allows you to predict your mortgage costs and budget accordingly. This is a great option for older borrowers who have a stable source of income.
On the other hand, if you’re just starting out in your career and expect your income to rise significantly over the coming years, or you don’t intend to stay in the property for more than a decade, an adjustable-rate jumbo loan is a fantastic option.
These have a fixed-rate period at the beginning of the loan term, then adjust according to market conditions within 5, 7, or 10 years. With an adjustable-rate loan, you can benefit from low introductory costs, and then refinance or sell your property within a few years.
Jumbo Loan Rates in Texas
Interest rates change frequently based on the current market. Jumbo loan rates are a bit higher than other loan products, so it’s important to seek up-to-date information as you prepare to buy.
You can check today’s jumbo loan rates on our website based on your specific parameters, including the zip code, your credit score, and your expected down payment. Here, you can explore your different options, including what your estimated monthly payment will be, so that you’re armed with all the information you need to make a great decision.
Where to Find Jumbo Loan Lenders in Texas
Because of the high risk, there are fewer jumbo loan lenders than there are for smaller loans, making it even more important to vet your lender before you sign any paperwork.
F5 Mortgage provides numerous products, including jumbo mortgages, so you can rest assured that you’ll find the product that is right for you. You’ll work with an officer who will help you explore your options based on your specific goals, as well as guide you through the whole process specific to your region.
Alternatives to Jumbo Loans
While jumbo home loans are a perfect option when purchasing your dream home, there are other alternatives based on your specific goals with this new property. Two of the most popular are DSCR loans and bank statement loans.
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DSCR Loans
DSCR loans are used to finance properties that will be making an income, such as vacation rentals and multi-unit apartments.
They have a different underwriting process that relies on the income-producing potential of the property, with less emphasis on the borrower’s financial profile. These are an excellent option for those purchasing Texas investment property that falls above the conforming limit set by the FHFA.
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Bank Statement Loans
It can be difficult for self-employed borrowers to access mortgage products because most lenders are leery of borrowers with inconsistent incomes. Thankfully, there are options other than jumbo loans that can help you achieve your dream of home ownership.
Bank statement loans are products made for the self-employed. They rely on 12–24 or more months of bank statements to assess your average cash flow and identify whether you can pay your mortgage based on your average income. This process is also faster and easier than underwriting a jumbo loan.
Considering a Jumbo Loan?
A jumbo loan in beautiful Texas allows you to purchase a luxury property for business or personal needs, and F5 Mortgage is here to help. We’ll help you gather everything you need to get approved and explore your options to ensure you get the best possible product for your goals.
Ready to get started? Contact us today, or get a free quote based on your borrower profile. We look forward to helping you purchase or refinance the perfect property.
