Navigating Jumbo Loans in Boulder: New Changes For 2025

Navigating the mortgage process can be complex, especially when it comes to jumbo loans. In Boulder, where real estate prices are well above the national average, understanding jumbo loans becomes crucial for prospective homebuyers.

This article breaks down what jumbo loans are, the current conforming loan limits, low down payment options, specifically focusing on options available up to 90% and 95% financing.

What is a considered a Jumbo loan in Boulder?

A jumbo loan is a type of mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These limits determine the maximum allowable loan amount for mortgages that can be purchased or guaranteed by Fannie Mae or Freddie Mac, the two government-sponsored enterprises. Due to their size, jumbo loans are not eligible for purchase by these entities, which is why they come with different underwriting standards.

Current Conforming Loan Limits

As of 2025, the typical conforming loan limit for most areas in the U.S. is set at $806,500 for a single-family home. However, this limit is greater in select high-cost areas in Colorado. Most of the counties surrounding Denver like Arapahoe County are limited to $833,750.

For Boulder County, the conventional loan limit is even higher due to the area’s elevated real estate prices. Boulder has a conforming loan limit of  $862,500 for a single-family home. This means that any loan amount above this limit would be categorized as a jumbo loan.

Characteristics of Jumbo Loans

Jumbo loans are characterized by the fact that they:

1. Exceed Conforming Loan Limits: Any loan above $862,500 (or the local limit, in Boulder’s case) is a jumbo loan.
2. Can Have Higher Interest Rates: Generally, because they represent a higher risk for lenders, jumbo loans come with higher interest rates compared to conforming loans. This is more true for home buyers financing over 90% loan to value.
3. Full Documentation: Borrowers typically need to provide detailed financial documentation, including income verification, credit history, and asset documentation. However, new bank statement qualifying programs are now available to self-employed business owners.
4. Do Not Require PMI with Certain Options: Some jumbo loans are structured with combo loan options that avoid the need for Private Mortgage Insurance (PMI), even at lower 5% down payments, making them more appealing for homebuyers.
5. Jumbo Refinance Options: Borrowers have assorted refinance for both rate-term reduction and cash-out refinance.

Low Down Payment Options for Jumbo Loans

Traditionally, jumbo loans have required a substantial down payment, often around 20% with most banks and lenders. However, new program options now allow qualified buyers to secure jumbo loans with as little as 5% down. Here are some of the nuanced options available for those looking to enter the Boulder real estate market:

5% Down Payment Jumbo Loans

A 5% down payment jumbo loan is an excellent opportunity for homebuyers who may not have the means for a greater down payment. Select lenders in Boulder offer this option, provided borrowers meet specific credit and income criteria. Here are the general guidelines:

• Credit Score: Borrowers typically need a strong credit score, often starting around 680 or higher, to be eligible for a 5% down payment jumbo loan.
• Debt-to-Income Ratio: Lenders often look for a debt-to-income (DTI) ratio of 45% or lower, although some may allow ratios up to 48%, depending on the overall strength of the borrower’s application.
• Verification of Assets: Borrowers may need to demonstrate liquid reserves beyond the down payment that could cover several months’ worth of mortgage payments.
• Loan Amount Limits:  95% financing is generally limited to $1,750,000 loan amounts depending on the borrowers qualifications.

10% Down Payment Jumbo Loans

• Qualifying Requirements: The general credit and qualifying requirements are the same as above. Credit score requirements do increase to 700 for borrowers financing any loan over $2m.
• Loan Amount Limits:  90% financing is generally limited to $2,500,000 loan amounts depending on the borrowers qualifications.

These loans cater to individuals who might be first-time homebuyers or young professionals looking to upgrade their living situation without a hefty upfront payment.

No Monthly Mortgage Insurance Options

One of the most significant advantages of jumbo loans in Colorado is the opportunity to avoid monthly mortgage insurance, even with a 5% down payment. Here’s how this works:

• Larger Down Payments: While a 5% down payment option is available, many jumbo loans are also structured for even larger down payments that can further reduce the need for mortgage insurance.
• Higher Credit Score Considerations: Lenders may waive PMI for borrowers who meet or exceed the required credit score benchmarks. With high credit scores and significant equity in the home, borrowers can bypass PMI, resulting in substantial monthly savings.

For example, let’s set a scenario: A home purchase price of $1.3 million with a 5% down payment amounts to $1,235,000 being financed as a jumbo loan. By avoiding PMI on a loan amount this size, the homeowner anywhere from $400 to $600 monthly, depending on the specific terms of the loan.

Benefits of Avoiding PMI

1. Lower Monthly Payments: Without PMI, your monthly mortgage payments can be significantly lower, which makes the overall cost of borrowing more manageable.
2. Increased Affordability: Savings from not paying PMI can allow borrowers

Buyers can connect with us today to learn more about any of the programs listed or get a quick rate quote. Just call above, or just submit the quick Info Request Form on this page.