How jumbo loans can help home buyers and your builder business

May 18, 2022

Discover the lending option that enables a real estate agent or builder clients to afford luxury real estate, so you can keep closing homes.

 

While COVID-19 has caused certain financial challenges, U.S. Bank is equipped to help people move forward with their financial goals. This is especially true for home buyers currently searching for higher-valued homes that fit their lives and budget. U.S. Bank jumbo loans are helpful options available for these buyers, by lending 10 percent down up to $900,000 to $1.25 million, depending on the program. This type of loan can make a big difference for some clients while also enabling real estate agents and builders to sell more homes.

For U.S. Bank client, Michele Joy, Vice President of Sales and Marketing at a home building company, jumbo loans have allowed buyers to continue purchasing homes during COVID-19, and helped businesses thrive. Read on for her story, plus more information on how the loan process works.

 

How jumbo loans help real estate agents and builders

While typical conforming loans have a limit of $647,200 in much of the US, jumbo loans have a higher limit that make it possible for some home buyers to afford luxury homes that otherwise might not be in their price range. Over the last several months, Michele has seen how this option has helped her home building company retain even more buyers.

Having the ability to suggest a jumbo loan product to qualifying buyers has made all the difference for our home building company and buyers in many of our communities with price points averaging $1 million dollars, says Michele. “The consistent offering of the jumbo loan product by U.S. Bank allowed us to continue selling and closing homes without missing a beat,” she adds.

In fact, when building was temporarily shut down in April and May of 2020 and construction had stopped, “we were still closing homes, in part because of the jumbo loan option for buyers. We did not miss a closing during the height of the pandemic,” says Michele.

 

How jumbo loans help buyers

While jumbo loans are good for businesses, they can also make a positive impact on buyers. Our sales team shared their knowledge of the program with buyers as an appealing financing solution, with fewer restrictions than some alternative banks, increasing the number of buyers who could participate. This ultimately led to an increase in sales.

For example, our building company recently had a home buyer at their Boulevard community in Dublin, Calif., who had just started new employment working for a large company with a signing bonus. This buyer had no history of bonus or Restricted Stock Unit (RSU) type of income, so the standard requirements to consider the bonus and RSU income had not been met. This meant they didn’t qualify using only base income, explains Michele. “Utilizing the jumbo loan program offered by U.S. Bank and the flexibility of portfolio lending, the buyers were qualified with a 10 percent down payment. This particular home buyer’s situation would not have been acceptable on any agency or any non-jumbo product,” she says.

 

Navigating the virtual landscape

While jumbo loans help realtors and builders make sales, COVID-19 has presented its own set of challenges for these businesses. In response to the stay-at-home guidelines and social distancing recommendations, Michele’s team changed their way of operating to keep business going strong.

“We did a major shift with our team to embrace virtual,” she says. “We have been working on ways to make the home shopping experience as simple and seamless for the buyer as possible.” This included setting up technology called MyTime that enables home buyers to visit and tour by themselves, and doing virtual appointments to walk buyers through homes being built for them.

“Working to ensure that we could interact with the customer virtually, by phone or safely in person was important to ensure we could continue to serve our buyers during these challenging times,” says Michele. In addition to jumbo loans, making these types of adjustments and accommodations in response to COVID-19 is a critical part of continuing business operations.

In addition, the U.S. Bank online application process has allowed buyers to handle most of the loan process remotely, which Michele says has eased the process for her buyers – especially in the context of COVID-19.

 

Jumbo loan qualification and approval process

To be eligible for a jumbo loan, home buyers must have a high credit score. Typically, this means their FICO score is at least 740. Income requirements must be met, and financial information must meet a certain set of standards as well. In addition, the buyer’s debt-to-income ratio needs to be less than 45 percent. Finally, the property appraisal is required to support the home’s purchase price and the mortgage requested by the buyer. A mortgage loan officer can also help buyers figure out whether a traditional loan or a jumbo loan would serve them best in their situation and discuss mortgage rates.

 

Learn more about jumbo loans offered through U.S. Bank.

Related content

Evaluating interest rate risk creating risk management strategy

Webinar: CRE technology trends

Restaurant surveys show changing customer payment preferences

Enhancing the patient experience through people-centered payments

Digital trends poised to reshape hotel payments

Cashless business pros and cons: Should you make the switch?

Automate escheatment for accounts payable to save time and money

3 benefits of integrated payments in healthcare

Improve government payments with electronic billing platforms

Unexpected expenses: 5 small business costs to know and how to finance them

What you should know about buying a car

Is it the right time to refinance your mortgage?

6 questions to ask before buying a new home

What is a home equity line of credit (HELOC) and what can it be used for?

Your financial aid guide: What are your options?

3 awkward situations Zelle can help avoid

Real world advice: How parents are teaching their kids about money

A passion for fashion: How this student works the gig economy

Helpful tips for safe and smart charitable giving

Travel for less: Smart (not cheap) ways to spend less on your next trip

Maximizing your infrastructure finance project with a full suite trustee and agent

How to reward employees and teams who perform well

Myth vs. truth: What affects your credit score?

More payment options create checkout success

Want AP automation to pay both businesses and consumers?

8 steps to take before you buy a home

What to know when buying a home with your significant other

Allowance basics for parents and kids

4 ways Request for Payments (RfP) changes consumer bill pay

Common unexpected expenses and three ways to pay for them

Access, flexibility and simplicity: How governments can modernize payments to help their citizens

At your service: outsourcing loan agency work

ABCs of APIs: Drive treasury efficiency with real-time connectivity

30-day adulting challenge: Financial wellness tasks to complete in a month

High-yield bond issuance: 5 traits lawyers should look for in a service provider

What you need to know before buying a new or used car

Year-end financial checklist

Trends in economics, immigration and mobility policy

Putting home ownership within reach for a diverse workforce

Administrator accountability: 5 questions to evaluate outsourcing risks

An investor’s guide to marketplace lending

What is a CLO?

Beyond Mars, AeroVironment’s earthly expansion fueled by U.S. Bank

Refinancing your practice loans: What to know

ABL mythbusters: The truth about asset-based lending

What type of loan is right for your business?

Collateral options for ABL: What’s eligible, what’s not?

Can ABL options fuel your business — and keep it running?

Easier onboarding: What to look for in an administrator

Insource or outsource? 10 considerations

10 ways a global custodian can support your growth

4 questions you should ask about your custodian

Refining your search for an insurance custodian

Service provider due diligence and selection best practices

Colleges respond to student needs by offering digital payments

6 timely reasons to integrate your receivables

Benefits of billing foreign customers in their own currency

Hospitals face cybersecurity risks in surprising new ways

Webinar: Robotic process automation

5 Ways to protect your government agency from payment fraud

Complying with changes in fund regulations

Government agency credit card programs and PCI compliance

Business risk management for owners of small companies

Evaluating interest rate risk creating risk management strategy

Modernizing fare payment without leaving any riders behind

Tap-to-pay: Modernizing fare payments pays off for transit agencies and riders

How real-time inventory visibility can boost retail margins

Escheatment resources: Reporting deadlines for all 50 states

Payment industry trends that are the future of POS

White Castle optimizes payment transactions

Managing the rising costs of payment acceptance with service fees

Three healthcare payment trends that will continue to matter in 2022

Webinar: CSM corporation re-thinks AP

Increase working capital with Commercial Card Optimization

Top 3 ways digital payments can transform the patient experience

Automate accounts payable to optimize revenue and payments

A simple guide to set up your online ordering restaurant

ePOS cash register training tips and tricks

Ways prepaid cards disburse government funds to the unbanked

3 reasons governments and educational institutions should implement service fees

Webinar: AP automation for commercial real estate

Understanding and preparing for the new payment experience

Addressing financial uncertainty in international business

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

Higher education and the cashless society: Latest trends

5 winning strategies for managing liquidity in volatile times

3 ways to make practical use of real-time payments

The future of financial leadership: More strategy, fewer spreadsheets

4 benefits to paying foreign suppliers in their own currency

Restaurant surveys show changing customer payment preferences

Unexpected cost savings may be hiding in your payment strategy

Digital trends poised to reshape hotel payments

Enhancing the patient experience through people-centered payments

Employee benefit plan management: trustee vs. custodian

Choosing your M&A escrow partner

Tech lifecycle refresh: A tale of two philosophies

Changes in credit reporting and what it means for homebuyers

High-cost housing and down payment options in relocation

Why retail merchandise returns will be a differentiator in 2022

4 benefits of independent loan agents

Middle-market direct lending: Obstacles and opportunities

What corporate treasurers need to know about Virtual Account Management

Overcoming the 3 key challenges of a lump sum relocation program

Crypto + Relo: Mobility industry impacts

For today's relocating home buyers, time and money are everything

Webinar: CRE Digital Transformation – Balancing Digitization with cybersecurity risk

Empowering team members

10 tips on how to run a successful family business

Streamline operations with all-in-one small business financial support

How mobile point of sale (mPOS) can benefit your side gig

Business tips and advice for Black entrepreneurs

How to fund your business without using 401(k) savings

Costs to consider when starting a business

How to test new business ideas

The role of ethics in the hiring process

8 ways to increase employee engagement

How to hire employees: Employee referral vs. external hiring

Give a prepaid rewards card for employee recognition

Checklist: Increase lead generation with website optimization

4 restaurant models that aren’t dine-in

Is your restaurant Google-friendly?

How business owners are managing during the supply chain crisis

3 simple brand awareness tips for your business

How a small business owner is making the workplace work for women

The growing importance of a strong corporate culture

Rethinking common time management tips

6 common financial mistakes made by dentists (and how to avoid them)

Technology strategies to complement your business plan

Business credit card 101

Meet your business credit card support team

How to apply for a business credit card

How jumbo loans can help home buyers and your builder business

When to consider switching banks for your business

5 tips to help you land a small business loan

Leverage credit wisely to plug business cash flow gaps

How to make the most of your business loan

How to accept credit cards online

Break free from cash flow management constraints

5 tips for managing your business cash flow

How Everyday Funding can improve cash flow

Improve online presence your business

How Shampoo’ed is transforming hair and inspiring entrepreneurs

The San Francisco bridal shop that’s been making memories for 30 years

How Al’s Breakfast is bringing people together

In a digital world, Liberty Puzzles embraces true connection

Celebrity Cake Studio’s two decades of growth and success

How a travel clothing retailer is staying true to its brand values

How to build a content team

Use this one simple email marketing tip to increase your reach

How (and why) to get your business supplier diversity certification

When your spouse has passed away: A three-month financial checklist

Student checklist: Preparing for college

How to save money in college: easy ways to spend less

The A to Z’s of college loan terms

Co-signing 101: Applying for a loan with co-borrower

Practical money skills and financial tips for college students

How I did it: Paid off student loans

Tips to overcome three common savings hurdles

Personal loans first-timer's guide: 7 questions to ask

Dear Money Mentor: How do I set and track financial goals?

5 tips to use your credit card wisely and steer clear of debt

P2P payments make it easier to split the tab

How to stop living paycheck to paycheck post-pay increase

Practical money tips we've learned from our dads

6 ways to spring clean your finances and save money year-round

How to cut mindless spending: real tips from real people

How to increase your savings

Is a home equity loan for college the right choice for your student

Parent checklist: Preparing for college

How to apply for federal student aid through the FAFSA

What to consider before taking out a student loan

Are you ready to restart your federal student loan payments?

Everything you need to know about consolidating debts

5 tips to use your credit card wisely and steer clear of debt

How to use debt to build wealth

What’s a subordination agreement, and why does it matter?

Understanding the true cost of borrowing: What is amortization, and why does it matter?

Your quick guide to loans and obtaining credit

Dear Money Mentor: How do I begin paying off credit card debt?

Dear Money Mentor: What is cash-out refinancing and is it right for you?

Overcoming high interest rates: Getting your homeownership goals back on track

What are conforming loan limits and why are they increasing

Money Moments: How to finance a home addition

How I did it: My house remodel

First-time homebuyer’s guide to getting a mortgage

These small home improvement projects offer big returns on investment

Should you get a home equity loan or a home equity line of credit?

Is a home equity line of credit (HELOC) right for you?

How to use your home equity to finance home improvements

How do I prequalify for a mortgage?

Can you take advantage of the dead equity in your home?

4 questions to ask before you buy an investment property

10 uses for a home equity loan

How to spot a credit repair scam

5 unique ways to take your credit card benefits further

Test your loan savvy

Take the stress out of buying your teen a car

Questions to ask before buying a car

How to choose the best car loan for you

U.S. Bank is not affiliated with the organizations mentioned in this publication unless otherwise notated. U.S. Bank is not affiliated with any real estate agent or builder. Opinions of home-building company representatives are their own and not those of U.S. Bank.

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.