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in Commerce, CA
Commerce sits in a market where property values can jump dramatically between industrial conversions and nearby residential areas. Knowing when you cross into jumbo territory matters because it changes your entire loan structure.
Conventional loans cover most properties up to $806,500 in Los Angeles County. Above that threshold, you're looking at jumbo financing with different rules, different rates, and different lender appetites.
Conventional loans follow Fannie Mae and Freddie Mac guidelines, which means standardized underwriting across hundreds of lenders. You can put down as little as 3% if you're a first-time buyer, though expect PMI below 20% down.
Credit standards are reasonable: 620 minimum for most programs, 680+ for best pricing. Debt-to-income ratios typically cap at 50%, and you'll need two months of reserves in most cases.
These loans work well for Commerce buyers looking at condos, single-family homes, or smaller multi-units under the county conforming limit. Closing costs run lower because lenders compete aggressively in this space.
Jumbo loans handle anything above $806,500 in Los Angeles County. These don't get sold to Fannie or Freddie, so each lender sets their own rules and holds more risk on their books.
Expect stricter requirements: most lenders want 700+ credit, 10-20% down minimum, and 6-12 months of reserves depending on loan size. DTI limits tighten to 43-45% in most cases.
Rates can surprise you. Sometimes jumbos price better than conventional because portfolio lenders want the business. Other times you'll pay a premium, especially if you're stretching on credit or assets.
The biggest split is liquidity. Conventional loans get packaged and sold, creating intense rate competition. Jumbo loans stay on lender balance sheets, so pricing depends on who wants your profile that week.
Down payment expectations shift hard at the jumbo threshold. While you can do 3% down conventional, most jumbo lenders start at 10% minimum and prefer 20% to avoid higher rates and MI premiums.
Underwriting gets more manual with jumbos. You'll answer more questions about large deposits, gift funds, and income documentation. Appraisals require more comparable sales and sometimes a second review.
If you're buying under $806,500 in Commerce, conventional wins on flexibility and cost. Lower down payments, easier qualification, and tighter rate spreads make it the default choice for most buyers.
Above that limit, you're in jumbo territory whether you like it or not. Shop hard across lenders because jumbo pricing varies wildly. One lender might quote 7% while another comes in at 6.5% for the same scenario.
Sometimes buyers near the threshold get creative: larger down payment to stay conventional, or seller credits to reduce loan amount. Run both scenarios before committing to see what actually saves money over your hold period.
$806,500 for Los Angeles County in 2024. Above that amount, you need jumbo financing regardless of property type.
Yes, but expect rate premiums and possibly mortgage insurance. Most lenders prefer 20% down for best jumbo pricing.
Not always. Portfolio lenders sometimes price jumbos competitively to attract high-quality borrowers. Shop multiple lenders.
Most lenders require 700 minimum, with 740+ needed for best rates. Some portfolio lenders go to 680 with compensating factors.
Typically 6-12 months of PITI. Higher loan amounts and lower credit scores push reserve requirements toward the upper end.