Question 1

What's the conforming loan limit in Clayton?

Accepted Answer

The limit follows Contra Costa County's baseline conforming cap, which is set annually by the FHFA. Rates vary by borrower profile and market conditions, but you'll need jumbo financing above the threshold.

Question 2

Can I use a conforming loan on a Clayton investment property?

Accepted Answer

Yes, but you'll need 15% down minimum and rates run 0.50-0.75% higher than primary residence pricing. Investment properties also face stricter reserve requirements, typically six months of mortgage payments in the bank after closing.

Question 3

How does PMI cancel on conforming loans?

Accepted Answer

PMI drops automatically at 78% loan-to-value based on the original purchase price. You can request cancellation at 80% LTV, but the lender may require a new appraisal to confirm current value.

Question 4

Do conforming loans allow gift funds for down payment?

Accepted Answer

Gift funds from family members cover the entire down payment at any percentage. You need a gift letter stating no repayment is expected and documentation showing the transfer from donor's account to yours.

Question 5

What if my Clayton home appraises above the conforming limit?

Accepted Answer

Your loan amount determines the program, not the appraised value. If you borrow under the limit but the home appraises higher, you stay conforming and just have more equity from day one.

Question 6

Can I refinance from FHA to conforming in Clayton?

Accepted Answer

You can refinance once you hit 20% equity to drop FHA mortgage insurance. Credit and income must meet conforming standards, and closing costs typically run 2-3% of the loan amount.

Conforming Loans in Clayton: Access Lower Rates in Contra Costa's Premium Suburb