N/O/O:  Jumbo Mortgage’s Scarlet Letters 

May 1, 2020

Day 46 of Shelter-in-Place

If you are a real estate investor at this time, in this market and looking for a jumbo mortgage to buy a non-owner occupied home (N/O/O), you may feel like our industry sees you with a scarlet letter(s) on your chest.  Before the pandemic, everybody wanted to talk to you, but now…now, you cannot find a mortgage lender to make you a jumbo loan.  Many of the options that existed before are gone.  The ones that remain have been restricted, their guidelines whittled down to the ultra-conservative.  Each day, you struggle to learn what’s still possible in the realm of mortgage lending, because you sense that during the economically challenging months ahead, you’ll come across a real estate investment opportunity.  Sot at least for today, we can affirm the following:

  • The conforming loan limits in most counties are $510,400 for a one-unit property, $653,550 for a two-unit property, $789,950 for a three-unit property and $981,700 for a 4-unit property.  Some counties in higher cost areas have an additional tier, known as “jumbo conforming” or “super conforming” or “high balance conforming” that allows a borrower to reach higher in loan amount with a conforming loan.
  • In the California Bay Area, the high balance limits go as follows; 1-unit to $765,600, 2-unit to $980,325, 3-unit to $1,184,925 and 4-unit to $1,472,550.
  • One-unit properties allow a maximum 85% loan-to-value (LTV), or a 15% down payment, on an investment property purchase using a conforming loan.  PMI would be required.
  • Two- to four-unit properties require a 75% LTV or a 25% down payment with conforming scenarios, but remember, the conforming loan limits are higher for these properties.
  • With a 35% down payment, we can lend to a loan amount of $1.5MM (purchase price of approximately $2.3MM or higher), using a jumbo mortgage.

Investment property financing, also known as financing for rental properties or “non-owner occupied” homes, is still available to the real estate investor.  Once above he conforming loan limits, the options are no doubt more limited, yet still exist.  If you need help navigating the world of the shunned, recruit our help today.  Things will get better and we’re here to help until they do.

Twice-told tales,


Rob Spinosa
Vice President of Mortgage Lending
Guaranteed Rate
NMLS: 22343
Cell/Text: 415-367-5959

Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960
Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

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