With home prices rising steadily in Portland, Oregon, more and more home buyers are turning to jumbo loans to finance their purchase. But what’s considered a jumbo loan in Portland, in 2018? And how do they differ from “regular” mortgages. Here’s what home buyers and mortgage shoppers need to know.
Jumbo Loans in Portland, Oregon: 2018 Update
Quick fact: The conforming loan limit for Portland, Oregon is $453,100, for a single-family home. Anything above that amount would be considered a jumbo mortgage.
A conventional or “regular” mortgage loan can either be conforming or jumbo. It depends on the amount being borrowed. Here’s the difference between them:
- A conforming loan in Portland is one that meets or “conforms” to the size limits used by Fannie Mae and Freddie Mac (the government-sponosored corporations that buy mortgages from lenders). Fannie and Freddie can only purchase loans up to a certain amount, and this is known as a conforming loan limit. These limits are established by the Federal Housing Finance Agency, which regulates Fannie and Freddie.
- A jumbo loan in Portland is one that exceeds the conforming limits mentioned above. It is too big to be sold to Fannie or Freddie via the secondary mortgage market. For this reason, jumbo mortgage products can also be referred to as “non-conforming” loans.
In Portland, a jumbo loan is a conventional mortgage product that exceeds the conforming limit of $453,100. That’s the “magic number” or threshold that separates a conforming loan from a jumbo. This limit applies to all of Multnomah County, as well as the entire Portland metro area. In fact, all counties in the state share this limit in 2018, with the exception of Hood River County.
Because there’s a larger amount being borrowed, the income requirements can be higher for jumbo loans. The most important thing is that the borrower has sufficient income to keep up with the monthly payments and repay the loan. This is measured using tax records, banks statements, and pay stubs.
Aside from that, the process for applying for a jumbo mortgage loan in Portland is very similar to the process for smaller conforming loans. Please contact us if you have questions about it.
How it Stacks Up to Home Prices
So we know that, in 2018, a jumbo loan in Portland is one that exceeds the conforming limit of $453,100. How does that number relate the real estate market, and to home prices in particular?
According to Trulia and Zillow, the median home price in Portland was around $413,000 as of March 2018. That’s a little below the conforming loan limit for Portland, Oregon. This means that more than half of all homes sold in Portland recently fall below the jumbo loan threshold.
In theory, this would also mean that home buyers in and around the city should have plenty of properties to choose from, without having to use a jumbo mortgage loan. But the reality is that inventory is very low right now within the Portland real estate market. It’s especially tight at the lower end of the pricing spectrum, where “starter homes” are bought and sold.