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in Santa Monica, CA
Santa Monica's real estate sits at two price points: properties under $806,500 and luxury homes above that threshold. That number matters because it's the 2025 conforming loan limit for Los Angeles County.
Cross that line and you're in jumbo territory with different rules. Most Santa Monica buyers face this choice because inventory skews above conforming limits in coastal neighborhoods.
Conventional loans work for properties up to $806,500 in LA County. You can put down as little as 3% if you're a first-time buyer, though 5-20% is standard.
Credit requirements start at 620 for most programs. PMI applies below 20% down but drops off once you hit that equity threshold through payments or appreciation.
These loans follow Fannie Mae and Freddie Mac guidelines. That means standardized underwriting and competitive rates because lenders can sell the paper easily.
Jumbo loans cover anything above $806,500 in Santa Monica. You'll need 10-20% down depending on the lender and loan amount, with most requiring 20% for the best terms.
Credit standards run higher—most lenders want 700 minimum, 720+ for competitive rates. You'll also need 6-12 months of reserves in the bank after closing.
No PMI regardless of down payment, which helps offset higher rates. Lenders hold these loans in portfolio, so they set their own rules and price for the risk.
The rate spread between conventional and jumbo runs 0.25-0.75% depending on market conditions and your profile. Jumbo rates used to always run higher, but strong borrowers sometimes see competitive pricing now.
Documentation gets stricter on jumbo deals. Expect full asset verification, employment calls, and more scrutiny on income sources. Self-employed borrowers face tougher standards.
Reserves matter more on jumbo loans. Where conventional might need 2 months, jumbo lenders want 6-12 months of mortgage payments sitting in accounts after you close.
If you're buying under $806,500 in Santa Monica, conventional wins every time. Lower rates, easier qualifying, and you can still do 5% down if your credit is solid.
Above that threshold you don't have a choice—you need jumbo financing. Focus on getting your credit above 720 and showing strong reserves to unlock better pricing.
The gray area hits when you're close to the limit. Sometimes putting 20% down to stay conventional beats 10% down on a jumbo, even on a $900k purchase. Run both scenarios.
$806,500 for single-family homes in Los Angeles County. Anything above requires jumbo financing with different qualification standards.
Yes, if you're buying a $950k home with $150k down, you'd have a $800k conventional loan. Often cheaper than $900k jumbo with $50k down.
Usually yes, by 0.25-0.75%. Strong borrowers with 20%+ down sometimes see competitive jumbo pricing, but conventional typically wins on rate.
Most lenders want 700 minimum, 720+ for best pricing. Below 700 you'll face rate bumps or need larger down payments.
Lenders hold these loans in portfolio instead of selling them. They want proof you can weather job loss or market downturns without defaulting.
Depends on the spread. Run the numbers—sometimes 10% down conventional with PMI beats 10% down jumbo, sometimes it doesn't.