Shopping for a $1M-plus home in Delray Beach or greater Palm Beach County and wondering how jumbo loans really work? You are not alone. High value homes are common along our coast, and financing them takes a different playbook than a standard mortgage. In a few minutes, you will understand what makes a loan “jumbo,” what lenders expect from affluent buyers, how appraisals and flood factors affect timelines, and how to make a financed offer compete with cash. Let’s dive in.

What a jumbo loan is

A jumbo mortgage is any first lien home loan that exceeds the conforming loan limit set by the Federal Housing Finance Agency. Loans at or below the FHFA limit can be sold to Fannie Mae or Freddie Mac. Loans above that limit are non‑conforming and are commonly called jumbos.

Because jumbo loans are not backed by Fannie or Freddie, lenders set stricter and more customized standards. That affects everything from the minimum down payment and reserves to documentation and pricing. The key takeaway is simple. “Jumbo” is not a fixed number nationwide. It updates every year and can vary by county.

Palm Beach limits and $1M-plus homes

The practical rule in Palm Beach County is straightforward. If your loan amount is above the county’s FHFA conforming limit for the year you are buying, you will need jumbo financing. Many single family homes in Delray Beach, Boca Raton, and coastal enclaves like Ocean Ridge will exceed the local conforming limit once you factor in typical down payments, especially for price points above $1M.

Do not rely on last year’s number. Check the FHFA’s current county table for the year you plan to close. If the table shows a limit of X for Palm Beach County, any mortgage amount above X is a jumbo. Your lender and agent can help you confirm how your purchase price and down payment translate into a loan amount relative to that limit.

Who makes jumbo loans

Multiple lender types are active in Palm Beach County’s luxury market. Each has different strengths, pricing, and documentation styles.

• Large national banks that hold jumbo loans in portfolio
• Private banks and wealth management divisions that lend to relationship clients
• Specialty jumbo lenders and national mortgage banks
• Credit unions and community banks with portfolio products
• Mortgage brokers who place loans with several jumbo investors
• Non‑QM and alternative documentation lenders for self‑employed or complex income

Competitive quotes vary widely in the jumbo space. It is smart to compare options, structure, rate, and fees, then choose the lender that fits your transaction timeline and documentation profile.

What lenders will require

Jumbo underwriting focuses on capacity, liquidity, and documentation. Expect higher standards than a standard conforming mortgage.

Down payment and LTV

• Many lenders expect at least 20 percent down for primary residences
• Large loans, second homes, condos, or unique properties may require lower loan‑to‑value ratios, sometimes 60 to 75 percent LTV
• Private mortgage insurance is not typical for first lien jumbos, so higher down payments or secondary financing may be needed to reach target LTVs

DTI and reserves

• Debt‑to‑income limits are often tighter than conforming
• Substantial post‑closing reserves are common, typically 6 to 12 months of principal, interest, taxes, and insurance, and sometimes more for very large loans or investment properties

Documentation checklist

Gather these items early to speed up pre‑approval and underwriting:

• Two years of personal federal tax returns and W‑2s or 1099s
• For business owners, two years of business tax returns, K‑1s, year‑to‑date profit and loss, and balance sheet
• Recent bank, brokerage, and retirement statements for assets and reserves
• Documentation for down payment sources, such as sale of securities, proceeds from a home sale, or properly documented gift funds
• Full credit report and explanations for any large liabilities or recent credit events
• For property, HOA documents if applicable, flood determination, and any required insurance

Ownership structures and source of funds

• If you are buying in a trust or entity, prepare formation documents, operating agreement, resolutions, and beneficial owner identification. Some lenders require a personal guarantee.
• Large deposits and transfers must be explained and documented. Expect enhanced due diligence on very large movements of funds.

Appraisals and coastal realities

Palm Beach County luxury properties come with distinct valuation and risk considerations.

Luxury appraisal complexity

• Comparable sales can be scarce for unique waterfront or historic homes. Appraisers may need to go farther for comps and make larger adjustments.
• Fees are usually higher, reports are more detailed, and timelines can run 2 to 3 weeks or longer for complex properties.
• Custom features, navigable water access, lot shape, and renovation quality can materially affect value, which makes local expertise essential.

Flood zones and insurance

• Many coastal properties sit in or near FEMA Special Flood Hazard Areas. Lenders will require a flood determination and flood insurance if maps dictate it.
• Premiums for waterfront homes can be significant. Compare National Flood Insurance Program options with private flood insurers and build premiums into your monthly cost analysis early.

Title and closing in Florida

• Expect a detailed title commitment, a current survey or survey updates, and hurricane related disclosures. Lenders require clear title and the correct insurance endorsements before closing.

Rates and what moves them

Jumbo rates are not set by Fannie Mae or Freddie Mac pricing. They reflect private investor appetite and bank balance sheet costs. Several drivers matter:

• Long‑term U.S. Treasury yields and the shape of the yield curve
• Bank funding costs and deposit flows
• Investor demand for non‑agency mortgage securities
• Your loan size, LTV, occupancy type, and credit profile

If you present a spotless profile with significant assets, some lenders may price very competitively. If your income is complex or documentation is non‑standard, expect a premium. Rate locks for jumbo loans can carry stricter policies for float downs and extensions, so confirm timelines before you lock.

Programs affluent buyers use

Jumbo lending spans more than a basic fixed rate loan. Depending on your goals, a specialized program may fit better.

• Portfolio loans for flexibility on credit or documentation
• Non‑QM options for irregular or hard to document income
• Asset‑depletion or bank statement programs for retirees or entrepreneurs
• Interest‑only and adjustable‑rate options to manage near‑term cash flow
• Bridge loans while selling a current home, or construction loans for new builds and major renovations

Each comes with tradeoffs in rate, fees, and risk. Align the loan choice with your hold period, liquidity plan, and tolerance for payment changes.

Cash vs. financed offers

Cash is powerful, but strong financing packages can compete. Here is how they compare in our luxury coastal market.

Make financing compete

• Obtain a full pre‑approval or, better, a pre‑underwritten conditional commitment before you shop
• Provide proof of funds for down payment and reserves with your offer
• Match or improve on a seller’s preferred closing timeline
• Consider appraisal gap language or larger earnest money if your risk tolerance allows

Timeline expectations

• Pre‑approval can be completed in a few days if documents are ready, up to 1 to 3 weeks for complex files
• Appraisal and underwriting typically run 2 to 6 weeks for jumbo loans
• Plan for 30 to 60 days to close. Entity ownership, foreign income, or construction elements can push timelines to 60 to 90 days

Costs to plan for

Closing costs on jumbo loans often resemble standard purchases as a percentage of price, but dollar amounts are larger because loans are larger. Budget for:

• Higher appraisal fees for complex or luxury properties
• Lender fees or origination points that can be higher for non‑conforming loans
• Title insurance, endorsements, and Florida specific items such as gap coverage
• Flood insurance premiums if required
• Surveys and wind mitigation or hurricane related inspections

Ongoing costs include your interest rate and insurance. Since private mortgage insurance is not typical for first lien jumbos, larger down payments are common.

A simple plan to get ready

Preparation is your advantage in Palm Beach County’s competitive market.

Before you shop

• Pull your credit and resolve any errors
• Gather two years of tax returns, W‑2s or 1099s, business returns, and K‑1s
• Assemble 12 to 24 months of bank and brokerage statements and document large transfers
• Decide on your ownership structure and collect entity or trust documents if applicable
• Obtain a pre‑approval or pre‑underwritten commitment from a lender experienced with jumbo loans

When you are under contract

• Order the appraisal immediately and confirm expected timing
• Complete flood determinations and compare NFIP and private flood options if needed
• Review title, survey, and HOA documents early to avoid last minute surprises
• Keep all funding sources documented and accessible for closing

Work with a local advocate

High value coastal purchases in Delray Beach reward buyers who pair smart financing with local expertise. From pricing strategy and appraisal risk to flood and insurance considerations, you want a calm, informed advocate at the table who understands neighborhood nuances and how to present a strong offer. If you are planning a $1M to $10M purchase, let’s talk about your objectives, financing plan, and a tailored path to a smooth closing. Connect with Cheran Marek to get started.

FAQs

What is a jumbo loan in Palm Beach County?

• A jumbo is any first lien mortgage above the FHFA conforming limit for Palm Beach County for the year you close. It is non‑conforming and carries stricter, lender specific standards.

How do I know if my loan is jumbo for a Delray Beach purchase?

• Check the current FHFA county limit for Palm Beach County. If your planned loan amount is higher than that number, you will need jumbo financing.

What down payment do jumbo lenders usually require on $1M-plus homes?

• Many expect at least 20 percent down, with lower loan‑to‑value ratios for larger loans, condos, second homes, or unique properties.

Why do jumbo appraisals take longer on coastal properties?

• Scarce comparable sales, custom features, and waterfront variables increase complexity. Reports are more detailed and can take 2 to 3 weeks or more.

Will I need flood insurance for a waterfront Boca or Delray home?

• If the property falls within a FEMA Special Flood Hazard Area, your lender will require flood insurance. Premiums can be significant and should be evaluated early.

Can a financed offer compete with cash in Palm Beach County?

• Yes, if you present a pre‑underwritten commitment, proof of funds for reserves, and a timeline that meets the seller’s needs. Consider appraisal gap strategies where appropriate.

What documents should I gather before applying for a jumbo loan?

• Two years of tax returns, W‑2s or 1099s, business returns if applicable, recent asset statements, documentation of down payment sources, and any entity or trust documents.