Utah Conventional Jumbo Loan

Last Updated: February 11, 2025


What is a Utah Jumbo Loan?

The term “jumbo mortgage” refers to mortgage loan amounts that exceed the conforming loan limits established by the Federal Housing Finance Agency (FHFA). The mortgage loan is therefore ineligible for delivery to Fannie Mae/Freddie Mac like a normal conventional mortgage loan would be.

In Utah, the current limits for 2025 are $806,500 in most counties, with the exception of Summit County and Wasatch County which have loan limits of $1,149,825.

Jumbo mortgage loans are designed for expensive or luxury properties, and they target buyers with high net worth, but limited liquidity (such as investors or entrepreneurs).

General Utah Jumbo Loan Requirements

Because these are loans that are not guaranteed by the second market, different lenders will have different guidelines, depending on their appetite for risk. Interest rates tend to also be higher, and the combination of high credit score + large down payment will always help you get the best deal.

There are some common threads among jumbo lenders, and here is what they all seem to agree on:

  • The minimum down payment is 10% on primary residences, and 20% on second homes and investment properties
  • A borrower’s credit score can be as low as 680, although many lenders have higher requirements
  • The reserves/emergency funds after the downpayment and closing costs should cover your mortgage payment for a minimum of 6 to 12 months. Retirement or investment accounts can be used without any funds being withdrawn.
  • Your debt to income will be determined by an automated underwriting system that considers all the factors of your application, but can’t ever exceed 50%. Many jumbo lenders won’t go over 45%
  • A second appraisal might be required in some cases (flipped properties) or for loan amounts over 1.5 million.

Feel free to email me for a detailed mortgage quote (no credit pull necessary) at

[email protected], or fill out an online application if you need a Pre-Qualification Letter.

Utah Jumbo Mortgage Guidelines

If you’re looking for more details on specific jumbo mortgage loan requirements, here is additional information. In many ways, jumbo mortgage guidelines follow the conventional secondary market guidelines, but tend to be stricter.

Eligible properties and occupancy

  • Primary, second/vacation homes and investment properties are allowed.
  • 1-4 units properties are allowed, except for vacation homes which are limited to 1 unit. Second homes and investment properties require at least 20% down.

Definition of a second/vacation home

A second home is a 1-unit single family residential, condominium or PUD property that the borrower occupies in addition to a primary residence for part of the year, for their exclusive use and enjoyment.

Requirements for second home properties:

  • The property must be occupied by the borrower for some portion of the year
  • The property must not be in the same market as the borrower’s primary residence
  • The property may be located in a resort or vacation area, although not always; however, property must be suitable for year-round occupancy
  • The borrower must have exclusive control over the property
  • The property cannot be subject to any agreements that give a management firm control over the occupancy of the property
  • The property must not be a rental property or a timeshare arrangement
  • For purchase transactions, the borrower may not be affiliated with the builder, developer or seller (must be an arms-length transaction)

The property must make sense as a second home, and transaction approval is subject to underwriter discretion.

Borrower eligibility

  • Must be legally present in the US – with restrictions for non-permanent resident aliens.
  • Non-occupant co-borrowers are not allowed on specific programs.

Temporary interest Rate Buy-Downs

  • Only allowed by limited lenders, on certain programs.

Derogatory credit

Jumbo mortgage lenders generally require a 7 year waiting period from the completion of a major derogatory event. This applies to bankruptcy, foreclosure, deed-in-lieu of foreclosure, short sale or charge off of a mortgage account, restructured or modified mortgage.

There are no exceptions for extenuating circumstances, and multiple bankruptcy filings automatically make a borrower ineligible for a jumbo mortgage loan.

Mortgage payment history

  • No late payments allowed in the previous 12 months.

Gift funds

Gift funds from an acceptable donor that does not have to be repaid are usually an acceptable source for down payment and closing costs on primary residences and second/vacation homes. A 5% minimum contribution from the borrower’s own funds is required.

A gift can be provided by:

  • A relative, as defined as the borrower’s spouse, child, or other dependent, or by any other individual related by blood, marriage, adoption, or legal guardianship;
  • A fiancé, fiancée, or domestic partner

The donor may not be or have any affiliation with a person or entity with an interest in the sale of the property, such as the seller, real estate agent or broker, builder, or any entity associated with them.

Business debt

A self-employed borrower who is personally liable for a business debt must qualify with the account payment unless it can be shown that the business debt is paid by the borrower’s business.

The following requirements must be met:

  • The account in question does not have a history of delinquency,
  • The business provides acceptable evidence that the obligation was paid out of company funds (such as 12 months of canceled company checks or 12 months business bank statements)
  • The underwriter’s cash flow analysis of the business took into consideration the payment of the obligation
  • the account does not have a history of delinquency

Using business assets

Assets from the borrower’s business are acceptable source of funds for the down payment and closing costs provided the following requirements are met:

  • The business account must be related to a business that the borrower owns and that is reflected on the loan application.
  • Business bank statements must not reflect any non-sufficient funds or overdrafts.
  • The borrower must have authority to access and withdraw funds for personal use. Cannot be used to meet the “reserve” requirement of the jumbo mortgage loan.
  • A CPA letter is needed to confirm that the withdrawal of the business assets will not have a negative impact on the business continuing to operate.

A cash-flow analysis (CFA) will be performed by the underwriter to determine that the withdrawal of the funds will not have a negative impact on the business.

Co-signed debt

If a borrower is jointly responsible on a co-signed debt but can prove that the payments are being made by the primary debtor, the debt can be omitted.

Documentation needed:

  • Most recent 12-month payment history showing timely payments.
  • Most recent 12 months canceled checks or bank statements showing payment being made by the primary debtor
  • For a mortgage: The party making the payments must be obligated on the Note for the Mortgage that is being excluded (rental income from the applicable property also cannot be used to qualify)

If the contingent joint liability has not been established for the full 12 months, or has not been paid timely, then the contingent liability must be included in the borrower’s debt-to-income ratio for qualification purposes.

In the case of court assigned debt, such as a mortgage after a divorce, the most recent 12 months payment history is not required. A copy of the court order and applicable paperwork will be needed.

Interested party contributions (IPC)

Funds from an interested party used to pay some or all of the borrower’s closing costs and prepaid items (such as taxes and insurance), including no more than 12 months of HOA dues (the funds for payment of HOA dues must be transferred directly to the HOA and reflected on the Closing Disclosure) are considered interested party contributions (IPCs).

Items paid by the property seller that are the responsibility of the seller, such as real estate sales commissions, charges for pest inspections, fees paid to trustees to release the security instrument, or costs that the property seller is required to pay under state or local law, are not subject to the IPC limits.

The maximum allowable contribution from interested parties is:

  • 3% on primary residences and second/vacation homes
  • 2% on investment properties

*The maximum contribution percentage is calculated using the lesser of the sales price OR appraised value. The amount of any contributions that exceeds the IPC limits will be considered a sales concession and subtracted from the sales price for qualifying purposes.

Reserves

Liquid financial assets (e.g. depository funds, stocks, bonds & mutual funds, and vested retirement assets) available after the closing are counted as reserves. They are measured by the number of months of mortgage payments (including escrow and homeowner’s association fees) for the subject property.

For questions on topics not covered here, feel free to e-mail me at [email protected] or text me at 801-473-3154.

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