Shopping for a home in San Jose and seeing prices that push your budget? In Santa Clara County, many buyers discover they need more than a standard conforming loan to compete. It can feel confusing to sort through conforming, high-balance, and jumbo options while keeping your payment and risk in check.

This guide breaks down what a jumbo loan means in Silicon Valley, how county loan limits work, what underwriters look for, and how to choose between fixed-rate and ARM options. You will also learn how RSUs and bonuses can support your approval. Let’s dive in.

Jumbo loan basics in Santa Clara County

A jumbo loan is a mortgage that exceeds the county’s conforming or high-balance limit. In high-cost areas like Santa Clara County, there is a higher ceiling for conforming loans, but once your needed loan amount is above that ceiling, you are in jumbo territory. Jumbos are financed by banks or private investors, so underwriting and pricing can differ from conforming options.

Conforming vs high-balance vs jumbo

• Conforming loan: Meets Fannie Mae or Freddie Mac rules and is at or below the county conforming limit.
• High-balance conforming: In high-cost counties, loans above the national baseline but at or below the county’s higher limit are still conforming for Fannie or Freddie eligibility.
• Jumbo loan: Any loan amount above the county’s high-balance limit. These are not eligible for Fannie or Freddie and follow lender or investor guidelines.

To check the current limit for Santa Clara County, use the official reference on the FHFA county loan limits page.

County limits and your purchase price

The county limit is a practical line between conforming and jumbo financing. A simple way to estimate the highest purchase price you can target while staying within the conforming limit is:

• Maximum conforming purchase price ≈ L / (1 − down payment%)

Illustrative example only:

• If L = $1,149,825 and you put 20 percent down, the maximum conforming purchase price is about $1,149,825 / 0.80 ≈ $1,437,281.
• With 10 percent down, the maximum conforming purchase price is about $1,149,825 / 0.90 ≈ $1,277,583.

If your target price requires a loan amount above the county limit, you will need jumbo financing unless you increase your down payment enough to bring the loan below the limit.

Why jumbo is common here

Santa Clara County is a high-cost market, and many single-family homes regularly sell above one million dollars. In San Jose and nearby cities like Cupertino, Palo Alto, Los Gatos, and Mountain View, typical prices often push buyers into high-balance or jumbo territory. Because of that, the loan type you choose can affect your approval path, interest rate options, and how much you need to bring to closing.

Jumbo underwriting checklist

Every lender sets its own policies, but jumbo underwriting in Silicon Valley tends to be more conservative than standard conforming loans. Here is what to expect.

Credit scores

• Conforming loans may approve in the mid-600s with strong factors.
• Jumbo loans often require higher minimum scores, commonly 700 to 720 or above. The most competitive pricing typically starts at 740 and higher.

Debt-to-income ratio

• Conforming programs can allow DTIs near 45 to 50 percent with compensating factors.
• Jumbo programs often cap DTI around 43 to 45 percent. Strong reserves, larger down payments, and excellent credit can help with exceptions in some cases.

Reserves after closing

• Conforming loans may require 2 to 6 months of reserves depending on the profile.
• Jumbo loans frequently require 6 to 12 months of reserves, and more if your down payment is small or your income is variable.

Down payment and LTV

• Conforming options can go as low as 3 to 5 percent down, with private mortgage insurance when loan-to-value is above 80 percent.
• Many jumbo programs expect 20 percent down or more. Some lenders offer 10 percent down options for top-tier borrowers, but these usually require higher credit scores and larger reserves.

Mortgage insurance

• Conforming loans with LTV above 80 percent typically use PMI. For a primer on what PMI is and how it works, review the CFPB explainer on private mortgage insurance.
• Jumbo loans generally do not use PMI in the same way. Expect larger down payments or pricing trade-offs instead.

RSUs, bonuses, and tech income

Many Silicon Valley buyers receive a mix of base salary, bonuses, and equity compensation such as RSUs or stock options. Lenders can count this income with proper documentation, but rules vary.

• Expect to provide pay stubs, W-2s, tax returns, and RSU vesting schedules.
• Some lenders average RSU or bonus income over 1 to 2 years and may discount it. Many will only count vested and reasonably predictable RSU income.
• If you recently changed roles, gather offer letters and any documentation that supports continuity of employment. Self-employed or 1099 earners typically need a two-year history and full tax returns.

The earlier you share your full compensation picture with lenders, the better they can structure your pre-approval and flag any overlays that might affect your buying power.

Rates and spreads: what to expect

Historically, jumbo loans often carried a small rate premium compared with conforming loans. Typical spreads have ranged from a few basis points to roughly 0.25 to 0.75 percentage points. Market dynamics can flip that at times, and top-tier jumbo pricing can be similar to, or even slightly better than, conforming.

Many factors influence your final rate: credit score, LTV, reserves, occupancy, documentation type, and the broader interest-rate environment. For a sense of market trends, you can track national mortgage rate movement through Freddie Mac’s Primary Mortgage Market Survey. Always request same-day quotes from multiple lenders and compare fixed and ARM options side by side.

ARM vs fixed for Silicon Valley buyers

Adjustable-rate mortgages can help you qualify at a higher price point by offering a lower initial rate than a 30-year fixed. Common ARMs include 5/1, 7/1, and 10/1, where the initial fixed period is followed by periodic adjustments tied to an index like SOFR. For an overview of how ARMs work, review the CFPB guide to adjustable-rate mortgages.

When ARMs can make sense

• You expect to sell or refinance within the initial fixed period.
• You anticipate rising income or RSU vesting that will improve affordability later.
• You want maximum near-term purchasing power in a competitive offer situation.

Risks to consider

• Payment reset risk after the fixed period. In a high-price market, even a modest rate increase can move your monthly payment significantly.
• Long-term ownership can favor the predictability of a fixed-rate mortgage.

Decision checklist

• Time horizon in the home.
• Tolerance for payment volatility.
• Likelihood and feasibility of refinancing later.
• Your income mix, especially if a large share is bonus or RSU-based.
• Stress test scenarios, such as what happens if your rate rises by a set amount in year 6.

Practical steps to boost buying power

Use these steps to decide if a jumbo loan fits your goals and to position your offer competitively in San Jose.

1. Check the current county limit

• Confirm this year’s Santa Clara County limit on the FHFA county loan limits page.

2. Run scenarios before you shop

• Use the formula L divided by 1 minus your down payment percentage to map the highest purchase price that stays conforming. Model versions with 10 percent down, 20 percent down, and potential ARM vs fixed options.

3. Talk to multiple lenders

• Request same-day quotes for high-balance and jumbo programs. Ask how they treat RSU income, required reserves, and maximum DTIs. Distinguish between pre-qualification and full pre-underwriting.

4. Document early and fully

• Gather pay stubs, W-2s, tax returns, bank and investment statements, RSU vesting history, bonus letters, and any offer letters. Early verification can surface obstacles before you write offers.

5. Align the loan to your timeline

• If you plan to stay 7 to 10 years or longer, compare the risks and long-run cost of an ARM to a 30-year fixed. If your horizon is shorter, an ARM might be a strategic fit.

6. Build a reserve cushion

• Aim to exceed the minimum reserve requirement if possible. Extra reserves add flexibility if rates rise or equity compensation fluctuates.

7. Team up with local experts

• Work with a neighborhood-focused agent team that understands San Jose micro-markets and jumbo financing norms. Strong guidance on pricing, contingencies, and timing can bring your financing plan and offer strategy together.

When you are ready to plan your search and compare lending paths, connect with the Dapkus Real Estate Team for local guidance tailored to your goals.

FAQs

Do I need a jumbo loan in Santa Clara County?

• Compare the loan amount you need to the county’s conforming limit on the FHFA page. If your required loan is above that limit, you will need a jumbo loan.

Can I avoid a jumbo by putting more down?

• Often yes. Increasing your down payment can bring the loan amount at or below the county limit. Use L divided by 1 minus your down payment percentage to estimate a conforming-friendly purchase price.

Do jumbo loans always have higher rates than conforming?

• Not always. Jumbos often carry a modest premium, but spreads change with market conditions and your profile. Top-tier borrowers sometimes see similar or slightly better jumbo pricing.

How are RSUs and bonuses treated for jumbo approval?

• Many lenders will count vested and predictable equity or bonus income with documentation, often averaging over 1 to 2 years. Bring vesting schedules, tax returns, and payout history to your lender early.

Are ARMs a good idea for San Jose jumbo buyers?

• ARMs can boost near-term buying power and may fit shorter time horizons. Weigh the payment reset risk, your comfort with volatility, and the odds of refinancing before the adjustment period.

What documents should I prepare for jumbo pre-approval?

• Gather pay stubs, W-2s, tax returns, bank and investment statements showing reserves, RSU and bonus history, and offer letters if you have a recent job change.