By Mike Basti, President and Mortgage Broker · NMLS #322904A conventional (conforming) loan falls at or below the Fannie Mae/Freddie Mac limit for your county — up to about $1,275,000 in high-cost California counties for 2027. A jumbo loan exceeds that limit. Jumbos aren’t backed by the agencies, so they carry stricter requirements — bigger down payments, higher credit scores, and more reserves — but rates are often competitive with (sometimes below) conforming on strong files.
Where the line falls in California
The 2027 conforming limit (already honored by some lenders ahead of FHFA's official announcement in late November 2026) is $850,000 in most of the country, but California’s high-cost counties (Los Angeles, Orange, the Bay Area) get the ceiling of about $1,275,000 for a one-unit home. Below your county limit = conventional/conforming; above it = jumbo. Many California buyers land just over the line, which is exactly where shopping pays.
| Feature | Conventional (Conforming) | Jumbo |
|---|---|---|
| Loan size | Up to county limit ($1,275,000 high-cost) | Above the county limit |
| Down payment | As low as 3–5% | Often 10–20%+ |
| Credit score | 620+ | 700–740+ typical |
| Reserves | Modest | Several months+ |
Which is better?
You don’t really "choose" — your loan amount and county limit decide it. If you’re near the line, putting a little more down to stay conforming can simplify approval; but a strong borrower shouldn’t fear a jumbo — pricing is competitive and a broker can shop jumbo guidelines that vary widely by lender.
Bottom line: Near the jumbo line in California? A broker can price it both ways — conforming with a bit more down vs. jumbo — and show you which is cheaper. See our jumbo program and conventional program.
The middle tier: high-balance conforming
California has three tiers, not two. In 2027, lenders are already honoring the new limits early:
| Tier | Loan amount (1 unit) | Where |
|---|---|---|
| Conforming (baseline) | Up to $850,000 | Most California counties |
| High-balance conforming | $850,001 to $1,275,000 | High-cost counties like Los Angeles and Orange |
| Jumbo | Above your county limit | Statewide |
High-balance loans still follow Fannie Mae and Freddie Mac rules, so down payment and credit requirements are closer to a regular conventional loan than a jumbo. Pricing can differ a bit from baseline conforming loans. Read more in high-balance vs. jumbo.
Worked example: staying under the line
Say you are buying a $1,550,000 home in Orange County. These are example numbers only.
| Down payment | Cash down | Loan amount | Loan type |
|---|---|---|---|
| 15% | $232,500 | $1,317,500 | Jumbo |
| 18% | $279,000 | $1,271,000 | High-balance conforming |
| 20% | $310,000 | $1,240,000 | High-balance conforming |
Adding about $46,500 to the down payment moves this loan from jumbo to conforming. Whether that is worth it depends on the pricing and reserve rules at the time, so compare both. Also check what the extra cash does to your reserves. Draining savings to stay conforming can leave you short of the cushion lenders want after closing.
Other ways around the jumbo line
- Piggyback second loan. A conforming first mortgage plus a second lien can keep the first loan under the limit.
- Multi-unit properties. Conforming limits are higher for 2–4 unit homes.
- Self-employed buyers. Non-QM jumbo options go up to $3M ($5M by exception), with credit generally starting at 640+.
Each option has its own costs and rules, so the cheapest path depends on your full file, not just the loan amount. Rates change daily, so for an accurate quote call 949-379-5320 (Newport Beach) or 310-759-4757 (Marina del Rey).
Frequently asked questions
What is the difference between a jumbo and conventional loan?
A conventional (conforming) loan is at or below the Fannie/Freddie county limit (up to $1,275,000 in high-cost California); a jumbo exceeds it. Jumbos have stricter down-payment, credit, and reserve requirements because they aren’t agency-backed.
What is the jumbo loan limit in California for 2027?
Anything above your county’s conforming limit is jumbo. High-cost California counties top out around $1,275,000 for a one-unit home in 2027; lower-cost counties are lower.
Are jumbo rates higher than conventional?
Not necessarily. On strong files, jumbo rates are often competitive with — and occasionally below — conforming rates, because lenders compete hard for well-qualified high-balance borrowers.
Is it better to stay under the jumbo limit?
If you’re just over the line, a slightly larger down payment to stay conforming can ease approval and lower reserve requirements. But qualified borrowers often do fine with a jumbo — compare both.
Is a high-balance loan the same as a jumbo loan?
No. A high-balance loan is still a conforming loan that follows Fannie Mae and Freddie Mac rules, just in a high-cost county. A jumbo is above the county limit and follows each lender's own rules.
Do I need more reserves for a jumbo than a conventional loan?
Usually, yes. Jumbo lenders often want several months of payments in the bank after closing, while conventional loans typically ask for less. Reserve rules vary by lender and loan size.
Save Financial, Inc. — NMLS #377740, DRE #01875766. Equal Housing Opportunity. Figures are illustrative for 2026 and not an offer of credit or a guarantee of rates or approval.