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in Tracy, CA
Tracy sits in an interesting position—most homes fall within conventional loan limits, but newer developments and larger properties can push you into jumbo territory. Knowing where that line sits determines your rate, down payment, and approval odds.
The 2024 conforming loan limit in San Joaquin County is $766,550 for a single-family home. Anything above that requires a jumbo loan with stricter underwriting standards.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. You can put down as little as 3% with proper income documentation and 620+ credit. PMI applies when you put down less than 20%, but you can cancel it once you hit 20% equity.
These loans offer the most competitive rates for borrowers with good credit. Closing costs tend to be lower than jumbo products, and lenders compete aggressively on pricing since they can sell these loans to the agencies.
Jumbo loans exist outside agency guidelines, so lenders hold more risk and demand more from borrowers. Most require 10-20% down depending on loan size and credit profile. You'll need reserves—typically 6-12 months of mortgage payments sitting in the bank after closing.
Credit standards run higher, usually 700 minimum but realistically 720+ for competitive rates. Debt-to-income ratios max out around 43%, sometimes lower. Lenders scrutinize income sources more carefully since they're keeping these loans on their books.
The rate gap between conventional and jumbo has narrowed significantly. Jumbo rates often match or slightly beat conventional rates for well-qualified borrowers. But qualifying is where jumbo loans get tougher—higher credit floors, bigger down payments, and more documentation.
Conventional loans give you flexibility on occupancy and property type. Jumbo lenders restrict investment properties more and apply tighter standards to condos. If you're buying a second home or rental, conventional financing usually works better unless the price forces you into jumbo range.
If you're buying under $766,550 in Tracy, conventional makes the most sense. Lower down payment requirements and easier qualification get more people approved. The exception: if you're putting down 20%+ and have excellent credit, compare both since some jumbo products price aggressively.
Above the conforming limit, jumbo is your only choice. Make sure you have 10-20% down, 720+ credit, and reserves to cover 6-12 months of payments. If those numbers stretch your finances, consider looking at homes under the limit or waiting to build more cash reserves.
The conforming limit for San Joaquin County is $766,550 for single-family homes. Anything above requires jumbo financing with different qualification standards.
Some jumbo lenders offer single-premium or lender-paid PMI options. But most require either 20% down or higher rates to offset the insurance cost.
Not always. Jumbo rates often match conventional for borrowers with 740+ credit and 20% down. The gap widens if your credit is below 720.
Most jumbo lenders want 6-12 months of mortgage payments in reserves after closing. The exact amount depends on loan size and your overall financial profile.
Yes, if your home appraises above the conforming limit and you want to cash out equity. You'll need to meet jumbo qualification standards at that point.