What is an Oregon Jumbo Loan?
Oregon jumbo loans are mortgages that exceed conforming loan limits. If you plan to buy a bigger home in Oregon, you may need a jumbo loan to finance the transaction.
Conforming Loan Limits in Oregon
The Federal Housing Finance Agency (FHFA) sets conforming limits for every county in the United States. The agency gathers repeat home sales and refinance data, and by weighting the averages, they produce the House Price Index (HPI). The HPI indicates home affordability, by region.
The HPI determines conforming loan limits for Fannie Mae and Freddie Mac, the two Government Sponsored Entities (GSEs) that acquire the vast majority of loans made between private lenders and consumers. Conforming loans meet several criteria, including borrower and property eligibility requirements. One thing is for sure: the loan amount cannot exceed conforming loan limits. When a loan exceeds those limits, it’s a jumbo mortgage.
For some counties in America, FHFA makes adjustments to the conforming loan limit. Large cities have higher loan limits that smaller, rural areas. But this is not the case in Oregon. Despite higher home prices in Portland, loan limits here are the same as any smaller city like Eugene.
Thus, all Oregon counties have the following conforming loan limit: $421,100
Oregon Jumbo Loan Requirements
Borrowers looking for a jumbo loan in Oregon will need excellent credit and bring a reasonable down payment to the table. Jumbo loans can be taken out on several types of residential properties.
Non-conforming loans, like jumbo mortgages, are typically held by the lender (rather than sold to Fannie Mae or Freddie Mac). Thus, loan requirements are not as “easy” as conventional or government-insured mortgage programs. Each lender has its own underwriting guidelines for jumbo loans, too. However, some broad generalizations can be made.
Oregon Jumbo Loan Property Eligibility
- There are no “high-cost area” adjustments in any county in the state of Oregon.
Eligible Property Types
- Owner occupied
- 1 to 4-unit primary residence
- Second homes
- Investment properties
Number of Units
While loan limits in Oregon are not adjusted on a regional basis, multi-unit properties get a break. Anything over the following conforming loan limits will require a jumbo loan:
- One Unit: $424,100
- Two Units: $543,000
- Three Units: $656,350
- Four Units: $815,650
Oregon Jumbo Loan Borrower Eligibility
Jumbo loans are typically not used by first time home buyers (but they are certainly not prohibited from using one). Most jumbo loan borrowers have equity from a prior home and can make a 20% down payment, which is ideal. That way, you won’t have to carry mortgage insurance.
Some lenders allow down payments as small as 10% down. However, that lower requirement isn’t necessarily available as the loan amount goes up. Meaning, down payment requirements might be stricter on a $1M loan than a smaller one for $750K.
Here are some typical down payment and borrower requirements to get a jumbo loan:
- 20% down payment gets a better interest rate and you won’t have to carry mortgage insurance
- 10% down (90% LTV) is still possible with exceptional credit
- FICO score minimums start in the 680-740 range
- 38% debt-to-income ratio (DTI)
Oregon Jumbo Loan Terms
- Fixed rate mortgage (FRM) or adjustable rate mortgage (ARM)
- $2 million loan limit ($3.0M on case-by-case basis)
- LTVs above 80% require private mortgage insurance (PMI)
Jumbo Loan Rates in Oregon
Borrowers can expect 0.25% to 0.50% percent higher interest rates for Oregon jumbo loans than conventional or government-backed mortgage programs. Higher rates are a risk premium. That balances out the lender’s risk of funding larger homes which can be more difficult to liquidate in the case of foreclosure.
Jumbo Loan Mortgage Insurance
As “non-conforming” loans, jumbo mortgages are not insured by the government. Whenever the loan-to-value (LTV) is greater than 80%, private mortgage insurance (PMI) is required.