Shopping for a home in McLean and wondering if your mortgage will be a jumbo? You are not alone. With many local homes priced at or above seven figures, the financing conversation often starts with whether your loan falls outside conforming limits and what that means for approval, rates, and documentation. In this guide, you will learn what counts as a jumbo loan in Virginia, how jumbos differ from conforming mortgages, what lenders typically expect in McLean, and how to prepare a clean, executive‑ready file. Let’s dive in.
What makes a loan “jumbo” in Virginia
A jumbo mortgage is any home loan that exceeds the conforming loan limit set each year by the Federal Housing Finance Agency. Conforming loans can be purchased by Fannie Mae or Freddie Mac. Jumbo loans typically are not, which is why the rules and pricing are different.
For 2024, the national conforming loan limit for a one‑unit property is $766,550. Some high‑cost counties have higher limits, up to 150 percent of the baseline, which is $1,149,825 for a one‑unit home. Counties can change status, so it is important to check the current FHFA table for the specific limit in Fairfax County before you write an offer.
In practice, many McLean buyers will consider jumbo financing. If you buy a $1,000,000 home and your loan amount is above the applicable FHFA limit for Fairfax County, your mortgage is likely a jumbo.
How jumbos differ from conforming
Underwriting fundamentals
Jumbo loans live outside the Fannie Mae and Freddie Mac box. Lenders often keep them in portfolio or sell them through private channels, so the rules are lender‑specific and can be tighter than conforming.
- Credit scores: 740 or higher is often preferred for best pricing. Some programs allow lower scores with tradeoffs.
- Debt‑to‑income: Many jumbo lenders cap DTI at 43 percent, and some prefer 36 to 40 percent depending on your profile.
- Loan amount tiers: Very large loans can fall into different pricing buckets with stricter terms.
Down payment and reserves
Down payment expectations are usually higher with jumbos. For primary residences, 20 to 30 percent down is common. Some lenders will allow 10 to 15 percent down for very strong borrowers, but these programs are less common and often require larger reserves and excellent credit.
- Reserves: Jumbo programs often require 6 to 12 months of PITI in verified reserves. Stronger credit and lower LTV can reduce this, while investor or second‑home scenarios can push it higher.
- Mortgage insurance: Traditional private mortgage insurance is not typically available for true jumbo high‑LTV loans, so lenders manage risk through larger down payments or portfolio coverage.
Income and documentation
Jumbos require thorough documentation. Executives with W‑2 income will usually provide recent pay stubs, W‑2s, and the past two years of tax returns. Self‑employed borrowers and those with complex compensation may need two years of business and personal returns, a year‑to‑date profit and loss statement, and bank statements.
- Stock‑based compensation: If you plan to use RSUs or option proceeds for your down payment, expect to document history, vesting, and liquidation. Lenders may ask for a two‑year track record.
- Non‑QM options: Bank‑statement or alternative documentation programs exist for well‑qualified borrowers who prefer to document cash flow differently. These can carry different pricing and reserve needs.
Appraisals and property type
Expect a full appraisal, often with a professional who has experience valuing luxury properties in Northern Virginia. Unique estates, large lots, guest houses, or custom finishes may require additional analysis or even a second appraisal in some cases.
For condos, many jumbo lenders require the building to meet stricter project standards. Your lender will review HOA documents, budget health, and owner‑occupancy ratios.
Rates, fees, and loan structure
Historically, jumbo rates were higher than conforming by roughly a quarter to three quarters of a point. In recent years the spread has moved around. At times in 2023 and 2024, well‑qualified jumbo borrowers saw rates near parity with conforming. This changes with investor appetite, funding costs, and your individual profile, so current quotes matter more than historical averages.
What drives pricing for jumbo mortgages:
- LTV and credit: Lower LTV and higher credit scores earn better rates.
- Loan size: Larger loans can have different pricing tiers.
- Structure: Fixed‑rate jumbos and popular adjustable‑rate options like 5/6 and 7/6 ARMs price differently. ARMs may offer a lower initial rate in exchange for future rate risk.
- Points and fees: Points and origination percentages may look similar to conforming loans, but the dollar amounts are higher because the principal is larger.
- Third‑party costs: Expect higher appraisal fees for luxury properties. Some lenders add overlays that can affect both cost and documentation.
If you are considering an interest‑only jumbo, review cash‑flow benefits alongside risk and exit strategy. Many lenders reserve interest‑only for very strong profiles and lower LTVs.
McLean and Northern Virginia context
McLean sits among Northern Virginia’s higher‑priced markets, close to Tysons, the Beltway, and the Great Falls border. Many single‑family homes list at or above $1,000,000, so jumbo approval is common for local buyers.
Typical buyer profiles in this area include relocating executives, C‑suite professionals, high‑earning federal contractors, and financial services professionals. Compensation often includes bonuses and equity, and many buyers hold significant liquid assets in brokerage accounts. These profiles fit the strengths of jumbo underwriting, which can account for complex income streams with the right documentation.
Northern Virginia has a deep lending ecosystem. Large national banks, regional and community banks, active credit unions, and private banks serve Fairfax County. Some lenders keep jumbo loans on balance sheet, which can create more flexibility for long‑tenured clients. Local mortgage professionals and underwriters who know McLean comparables and neighborhood nuances can help streamline valuation and approval.
For luxury condos, lenders may scrutinize building reserves and HOA health. For estates with acreage, guest houses, or distinctive amenities, give your contract calendar ample time for appraisal and any follow‑up analysis.
How to prepare: an executive checklist
Gathering a complete, clean file early helps you negotiate with confidence and close on schedule.
Documents most jumbo lenders request:
- Government ID and standard compliance items.
- Two years of personal federal tax returns, including all schedules.
- Recent pay stubs and W‑2s, or for self‑employed, two years of returns plus a year‑to‑date P&L.
- 60 to 90 days of bank statements and brokerage statements, with documentation for large deposits.
- Retirement and investment account statements. Seasoned assets often count toward reserves and down payment.
- Records for stock sales, RSU vesting, or option exercises used for funds to close.
- A brief letter explaining any credit events and evidence of on‑time housing payments.
- Property items as needed, such as HOA documents for condos.
Key decisions to discuss with your lender:
- Target LTV: Plan for 20 percent or more down on conventional jumbos. If you are considering 10 to 15 percent down, ask about reserve and credit requirements.
- Reserves: Budget for 6 to 12 months of PITI in liquid or easily verified accounts.
- Credit target: Aim for a 740 or higher score to widen options and improve pricing.
- Lender type: Compare national banks, portfolio lenders, private banks, credit unions, and mortgage brokers. Pricing, flexibility, and speed vary.
- Loan product: Evaluate 30‑year fixed versus 5/6 or 7/6 ARM options. Consider interest‑only only if the risk tradeoff fits your finances.
- Appraisal timing: Build enough time into your contract for luxury‑grade appraisals and any required reviews.
Advanced strategies that some executives use:
- Portfolio loans from private or local banks that tailor terms for high‑net‑worth clients and weigh assets heavily.
- Bank‑statement or other non‑QM jumbo programs for complex income.
- Securities‑based lending or lines of credit to bridge timing on sales or vesting events. These tools carry separate risks and costs and require careful coordination.
Smart timeline and offer strategy
In a competitive McLean segment, clean financing strengthens your offer. Secure a detailed pre‑approval with a jumbo‑savvy lender, not just a quick pre‑qualification. Align your financing timeline with appraisal expectations, HOA reviews for condos, and any liquidity events you plan to use for funds to close.
If you are choosing an ARM, map out potential rate scenarios and your expected time in the property. If you are using equity compensation for your down payment, coordinate vesting and sale windows early so funds are seasoned and documented by the time you write.
The bottom line for McLean buyers
Jumbo financing is common in McLean and Northern Virginia. The playbook is simple: know your county’s conforming limit, prepare a strong file, choose a lender that understands local luxury valuations, and select a loan structure that matches your risk profile and timeline. With the right preparation, a jumbo should feel straightforward, not stressful.
If you want a seasoned, discreet advisor to align your purchase strategy with McLean’s high‑end market, connect with Jeff Lockard. You will get clear guidance, measured advice, and a polished process from search to settlement.
FAQs
What defines a jumbo loan in Virginia?
- A jumbo loan is any mortgage that exceeds the FHFA’s conforming loan limit for the county. The 2024 one‑unit baseline is $766,550, with high‑cost areas capped at $1,149,825.
How do jumbo loans differ from conforming loans?
- Jumbos are not purchased by Fannie Mae or Freddie Mac, so lenders set stricter standards for credit, DTI, down payment, reserves, and documentation.
What down payment is typical for a jumbo in McLean?
- Many borrowers put 20 to 30 percent down. Some lenders offer 10 to 15 percent down to very strong borrowers with larger reserves and excellent credit.
What credit score is usually required for jumbo loans?
- A 740 or higher score is commonly preferred for the best pricing, though some programs allow lower scores with tradeoffs.
How much in reserves should I plan for?
- Many jumbo programs ask for 6 to 12 months of PITI in verifiable reserves for a primary residence, with more required for certain scenarios.
Are jumbo mortgage rates higher than conforming?
- Historically yes, but the spread moves with markets. In parts of 2023–2024, some jumbos priced near conforming. Current quotes are what matter.
Can I use RSUs or bonuses for my down payment?
- Often yes, with proper documentation. Expect to show history, vesting, liquidation, and sufficient seasoning of funds.
Do luxury properties require different appraisals?
- You will typically need a full appraisal by a professional experienced with high‑end properties. Unique estates may require additional analysis or a second appraisal.
