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in Loyalton, CA
Most Loyalton buyers use conventional loans because they fit the typical Sierra County home price. Jumbo loans kick in when you exceed federal conforming limits — currently $766,550 in most California counties.
The line between these loans matters because jumbo financing brings stricter requirements and different costs. Understanding which category your purchase falls into shapes your entire approval strategy.
Conventional loans follow Fannie Mae and Freddie Mac guidelines, which means predictable requirements. You typically need 620+ credit for approval, though better rates start around 700.
Down payments range from 3% to 20%, with PMI required below 20% equity. These loans offer the most competitive rates because lenders can sell them to Fannie or Freddie, reducing their risk.
Jumbo loans finance amounts above conforming limits without government backing. Lenders hold these loans in portfolio or sell them to private investors, which means tighter underwriting.
Expect 700+ credit requirements and 10-20% down minimums at most lenders. Some Sierra County properties with higher valuations need jumbo financing even though they're not luxury homes by coastal standards.
Credit standards separate these loans most dramatically. Conventional approvals start at 620; jumbo lenders want 700 or better and scrutinize credit history more carefully.
Reserve requirements differ substantially. Conventional loans might need two months of payment reserves; jumbo lenders often require six to twelve months. Rate differences vary by borrower profile and market conditions.
Your loan amount determines the starting point. Under $766,550 means conventional financing with more flexible guidelines and better rate options for most borrowers.
Above that threshold, jumbo becomes necessary but demands stronger financial positioning. If you're borderline, consider whether a slightly smaller purchase keeps you in conventional territory — the easier approval often outweighs having a bigger home.
Sierra County follows the standard conforming limit of $766,550. Loans above this amount require jumbo financing with stricter qualification standards.
Some lenders offer jumbo loans at 10-15% down, but expect higher rates and stricter requirements. Most competitive jumbo pricing starts at 20% equity.
Not always. Strong borrowers with excellent credit and large down payments sometimes get jumbo rates competitive with conventional. Rates vary by borrower profile and market conditions.
Conventional loans typically require 2-6 months of reserves. Jumbo lenders often want 6-12 months, especially on higher loan amounts or investment properties.
Yes, conventional loans work for second homes under conforming limits. You'll need 10% down minimum and slightly higher rates than primary residence financing.