California High-Balance Conforming: $1,149,825 Limit Explained

Why California’s Jumbo Limit Is Different (And Why It Matters)

California is one of the most expensive housing markets in the U.S.—and Fannie Mae and Freddie Mac (the government-sponsored enterprises that buy most mortgages) recognize this. Instead of the baseline conforming loan limit of $766,550 (2025), most California counties get a high-balance conforming limit of $1,149,825.

This isn’t a small detail—it’s a rate, reserve, and approval advantage that saves California buyers thousands annually. Understanding where the conforming limit ends and jumbo begins determines which lenders you shop, how much you’ll pay in interest, and whether you need 6 months or 12 months of reserves.

The Critical Threshold: $1,149,825 vs. $1,149,826

If your loan is $1,149,825 or less (in a high-cost California county), you qualify for high-balance conforming financing:

• Lower rates (0.125%–0.50% better than jumbo)
• Lower reserve requirements (6 months PITI vs. 9–12 months for jumbo)
• Easier approval (automated underwriting via Fannie/Freddie Desktop Underwriter)
• More lender competition (most banks, credit unions, and online lenders offer conforming)

If your loan is $1,149,826 or more, you need jumbo financing:

• Higher rates (0.125%–0.50% more than conforming, depending on credit/LTV)
• Higher reserve requirements (9–12 months PITI, sometimes 18+ for super-jumbo)
• Manual underwriting (portfolio lenders, private banks, stricter approval)
• Fewer lenders (not all lenders offer jumbo; shopping is critical)

Example: $1,720,000 purchase price, 20% down = $1,376,000 loan. This is a jumbo loan (above $1,149,825). If you increase down payment to 25% ($430,000), your loan becomes $1,290,000—still jumbo, but closer to the high-balance limit. If you can reduce the purchase price or increase down payment to get the loan under $1,149,825, you unlock conforming pricing and lower reserves.

California Counties: Which Get the $1,149,825 Limit?

Not all California counties have the same conforming limit. High-cost counties (based on median home prices) get the elevated $1,149,825 limit. Lower-cost counties revert to the baseline $766,550 limit.

High-Cost California Counties ($1,149,825 Limit)

Lower-Cost California Counties ($766,550 Baseline Limit)

Rural and less expensive counties (e.g., Fresno, Kern, Riverside, San Bernardino, Sacramento in some years) may have the baseline $766,550 limit instead of the elevated limit. Check your county’s specific limit before assuming you qualify for high-balance conforming.

Source: FHFA (Federal Housing Finance Agency) publishes annual conforming loan limits by county. Limits update every November for the following year.

High-Balance Conforming vs. Jumbo: Rate and Reserve Comparison

Scenario 1: $1,100,000 Loan (High-Balance Conforming)

• Loan amount: $1,100,000 (under $1,149,825 limit)
• Credit score: 740
• LTV: 80% (20% down)
• Rate: 6.50% (conforming pricing)
• Reserve requirement: 6 months PITI (~$50K)
• Monthly P&I: $6,955
• Total interest (30Y): $1.40M

Scenario 2: $1,400,000 Loan (Jumbo)

• Loan amount: $1,400,000 (above $1,149,825 limit)
• Credit score: 740
• LTV: 80% (20% down)
• Rate: 6.875% (jumbo pricing, +0.375% vs. conforming)
• Reserve requirement: 9 months PITI (~$95K)
• Monthly P&I: $9,205
• Total interest (30Y): $1.91M

Jumbo premium: $9,205 – $6,955 = $2,250/month (though loan is $300K larger). On a per-$100K basis, jumbo costs ~$35/month more due to higher rate.

Reserve burden: Jumbo requires $45K more in reserves ($95K vs. $50K)—meaningful for buyers with tight liquidity.

Strategies to Stay Under the High-Balance Conforming Limit

1. Increase Down Payment

If your loan is slightly over $1,149,825, increasing down payment can bring it under the limit.

Example: $1,720,000 purchase, 20% down = $1,376,000 loan (jumbo). Increase down payment to 25% ($430,000) → loan becomes $1,290,000 (still jumbo). Increase to 33% ($568,000) → loan becomes $1,152,000 (still just over limit). Increase to 35% ($602,000) → loan becomes $1,118,000 (high-balance conforming).

Trade-off: Putting $602K down vs. $344K down preserves $258K in cash but costs jumbo pricing (~0.375% higher rate). If you have liquidity and want better rates, maximizing down payment to stay conforming makes sense.

2. Reduce Purchase Price

If you’re shopping homes at $1,450,000–$1,500,000 (which trigger jumbo loans even at 20% down), consider homes at $1,430,000 or less. At 20% down, a $1,437,500 purchase = $1,150,000 loan (just over conforming). A $1,420,000 purchase = $1,136,000 loan (under conforming).

Reality check: In Bay Area, LA, and San Diego, $1.4M homes may be scarce or undesirable. But if you’re on the margin, $20K–30K reduction in purchase price can save $200–300/month in interest.

3. Use Piggyback Second Mortgage (80-10-10 or 80-15-5)

Some buyers use a piggyback second mortgage (home equity loan or HELOC) to keep the first mortgage under conforming limits.

Example: $1,600,000 purchase.

• First mortgage: $1,149,825 (80% of $1,437,281 adjusted value, conforming limit)
• Second mortgage (HELOC): $130,175 (remaining balance to get to 80% LTV)
• Down payment: $320,000 (20%)

Pros: First mortgage gets conforming pricing (lower rate, lower reserves). Second mortgage is smaller, higher rate but only on a portion.

Cons: Two loans = two payments, two sets of closing costs. HELOC rates are variable (often Prime + 1%–2%, currently ~9%–10%). You’ll need strong credit and income to qualify for both loans simultaneously.

When this works: If conforming rate is 6.50% and jumbo is 6.875%, the blended rate on conforming + HELOC may still beat straight jumbo—especially if you plan to pay off the HELOC quickly.

When Jumbo Makes More Sense Than Conforming

1. You’re Buying Well Above the Conforming Limit

If your loan is $2M+, you’re deep into jumbo territory. Trying to structure a conforming loan + massive second mortgage is impractical. Portfolio lenders and private banks offer better pricing and simpler underwriting for super-jumbo loans.

2. You Want Portfolio Lender Flexibility

High-balance conforming loans follow Fannie/Freddie underwriting guidelines—automated, rigid, strict DTI caps. Jumbo portfolio lenders offer:

• Manual underwriting (compensating factors for high DTI, self-employment)
• Stock compensation treatment (Bay Area tech workers with RSUs)
• Foreign national programs (no U.S. credit required)
• Asset-based underwriting (asset depletion for high-net-worth borrowers)

If your income is complex (K-1, stock comp, self-employment) or you’re a foreign national, jumbo portfolio lenders may approve you when conforming lenders won’t—even if your loan is under $1,149,825.

3. Relationship Banking Discounts

Private banks (J.P. Morgan, UBS, Northern Trust, Wells Fargo Private Bank) offer relationship pricing for jumbo clients who move deposits/investments to the bank. If you’re moving $2M+ in assets, relationship discounts (0.25%–0.75% off jumbo rates) can beat conforming pricing—especially for loans just over the conforming limit.

Example: Conforming rate 6.50%, jumbo rate 6.875%. Move $3M to private bank → relationship discount 0.50% → jumbo rate becomes 6.375% (beats conforming).

High-Balance Conforming Loan Requirements (California)

Even though high-balance conforming loans get better pricing than jumbo, they still have stricter requirements than baseline conforming loans ($766,550 and under).

Credit Score

• Minimum: 700 (some lenders require 720)
• Best pricing: 740+ (same as jumbo)
• Penalty for 700–720: +0.25%–0.50% rate adjustment

Down Payment

• Minimum: 10% (some lenders require 15%–20% for high-balance)
• Best pricing: 20%+ (LTV ≤ 80%)
• PMI required if down payment < 20% (and PMI on high-balance conforming is expensive—0.50%–1.00% annually)

Debt-to-Income (DTI)

• Max DTI: 43%–50% (automated underwriting allows higher DTI with compensating factors)
• Ideal DTI: 36% or lower for best pricing

Reserves

• Minimum: 6 months PITI (some lenders require 9 months for high-balance)
• Ideal: 12+ months (improves approval odds and pricing)

Occupancy

• Primary residence: Easiest approval, best pricing
• Second home: +0.50%–0.75% rate premium
• Investment property: +0.75%–1.50% rate premium

Real Scenarios: Conforming vs. Jumbo in California

Scenario 1: Palo Alto Tech Worker, $1,600,000 Purchase

• Purchase price: $1,600,000
• Down payment: 20% ($320,000)
• Loan amount: $1,280,000 (jumbo, above $1,149,825)
• Credit: 760
• Income: W-2 + RSUs (vested)

Conforming option: Not available (loan too large).

Jumbo option: Portfolio lender, 6.75% rate, 9 months reserves ($85K). Monthly P&I: $8,300.

Optimization: If buyer increases down payment to 28% ($448,000), loan becomes $1,152,000 (still over conforming). To get under $1,149,825, buyer needs 28.1% down ($449,600). This preserves conforming pricing (6.50%) → $7,280/month P&I → $1,020/month savings vs. jumbo.

Trade-off: $129,600 extra down payment ($449,600 vs. $320,000) to save $1,020/month = 10.6-year breakeven. If buyer plans to stay 10+ years, conforming wins. If buyer plans to move in 5–7 years, jumbo with lower down payment preserves liquidity.

Scenario 2: San Diego Foreign National, $2,000,000 Purchase

• Purchase price: $2,000,000
• Down payment: 35% ($700,000)
• Loan amount: $1,300,000 (jumbo)
• Credit: No U.S. credit (strong foreign credit)
• Reserves: $400K liquid

Conforming option: Not available (foreign nationals need U.S. credit history for Fannie/Freddie loans).

Jumbo option: Portfolio lender, foreign national program, 7.25% rate, 18 months reserves. Monthly P&I: $8,870.

Why jumbo wins: Portfolio lenders approve foreign nationals; conforming lenders don’t. Even if loan were under $1,149,825, buyer couldn’t qualify for conforming without U.S. credit.

Scenario 3: Los Angeles Self-Employed, $1,100,000 Loan

• Purchase price: $1,375,000
• Down payment: 20% ($275,000)
• Loan amount: $1,100,000 (under $1,149,825, high-balance conforming eligible)
• Credit: 720
• Income: Self-employed, inconsistent tax returns, strong bank statements

Conforming option: Automated underwriting (DU) declines due to self-employment income volatility and 48% DTI.

Jumbo option: Portfolio lender uses bank statement income program (12 months deposits), manually underwrites, approves at 6.875% with 9 months reserves.

Why jumbo wins: Even though loan is under conforming limit, conforming lenders can’t approve due to rigid automated underwriting. Portfolio jumbo lender’s manual underwriting is the only path to approval.

How to Check Your County’s Conforming Limit

1. FHFA Conforming Loan Limit Tool: https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limit-Map.aspx
2. Ask your lender: “What’s the conforming loan limit for [your county]?”
3. Fannie Mae Loan Lookup: Enter property address to see max conforming loan amount.

Pro tip: Some counties have census tract exceptions—specific ZIP codes with higher limits than the county average. Always verify your exact property’s limit.

FAQs: California High-Balance Conforming vs. Jumbo

Q: If my loan is $1,149,825 exactly, is it conforming or jumbo?
A: Conforming. The limit is inclusive—$1,149,825 and below qualifies. $1,149,826 and above is jumbo.

Q: Can I get a conforming loan for a second home or investment property in California?
A: Yes, but reserve requirements are higher (9–12 months PITI) and rates are 0.50%–1.50% higher than primary residence conforming loans.

Q: Do all California lenders offer high-balance conforming loans?
A: Most do, but some small credit unions or online lenders cap conforming loans at $766,550 (baseline limit). Shop lenders who explicitly offer high-balance conforming.

Q: If I’m buying in San Francisco ($1,149,825 limit) but the property is a condo, does the limit still apply?
A: Yes, but condo warrantability matters. If the condo project isn’t Fannie/Freddie approved, you’ll need a jumbo loan even if the loan amount is under $1,149,825.

Q: Can I refinance from jumbo to high-balance conforming if my home appreciates?
A: Yes. If your home value increases and your remaining loan balance drops under $1,149,825, you can refinance into conforming pricing (lower rate, lower reserves).

Q: Are high-balance conforming loans eligible for Fannie Mae HomeReady or Freddie Mac Home Possible (low-income programs)?
A: No. HomeReady and Home Possible cap at $766,550 (baseline conforming limit), even in high-cost areas.

Bottom Line: Know Your Limit, Optimize Your Loan Structure

California’s $1,149,825 high-balance conforming limit is a massive advantage for buyers in expensive markets—but only if you structure your loan to stay under it. Key takeaways:

1. Verify your county’s limit (not all California counties get $1,149,825).
2. Model down payment scenarios to see if you can drop under conforming limit (savings: 0.125%–0.50% rate).
3. Compare conforming + HELOC vs. straight jumbo if you’re slightly over the limit.
4. Shop portfolio jumbo lenders if your income is complex (self-employed, stock comp, foreign national)—conforming may auto-decline you.
5. Don’t assume conforming is always better: Relationship banking discounts and portfolio flexibility can make jumbo competitive.

Compare California jumbo lenders at Browse Lenders® to see conforming and portfolio options. Check your credit tier to understand pricing. Run loan scenarios to model down payment vs. rate trade-offs.

No guessing, no surprises—just transparent lending intelligence for California luxury buyers.