I'm Josh Penland, and I've been helping buyers finance higher-priced homes in Austin and across Travis and Williamson County for 23 years. A conversation I have all the time goes like this: a buyer finds a $1.75 million home in Westlake or Lakeway and assumes a jumbo loan means 20% down and a difficult, overly restrictive approval process.
It doesn't have to.
With access to more than 75 jumbo lenders and over 2,000 mortgage products, my team offers jumbo options with 10% or 15% down and no monthly PMI. Let me show you how jumbo financing actually works and what it can mean for your Austin-area home purchase.
What Is a Jumbo Loan in 2026?
A jumbo loan, also called a non-conforming loan, is a mortgage that exceeds the loan limit that Fannie Mae and Freddie Mac can purchase. The Federal Housing Finance Agency (FHFA) updates this limit annually.
For 2026, the baseline conforming loan limit for a one-unit home is $832,750, including Travis and Williamson counties (FHFA). Texas has no high-cost county exceptions, so the same limit applies throughout the state.
Jumbo status depends on your loan amount, not your home's purchase price. Buy a $1 million home and put 20% down, for example, and your $800,000 loan remains conforming. Borrow more than $832,750 and you're in jumbo territory.
Unlike conforming loans, jumbo loans don't follow one universal set of guidelines. Banks, investors and wholesale lenders can have different requirements, rates and qualification standards. That's one reason choosing the right jumbo lender matters.
Jumbo Loan Myths: You Don't Need 20% Down
Jumbo loans come with plenty of misconceptions: you need 20% down, perfect credit, extremely low debt and you'll automatically pay a much higher rate.
None of those are universal rules.
Many jumbo programs offer 10% or 15% down with no monthly PMI. That's important because conventional financing generally requires private mortgage insurance when putting less than 20% down.
The bigger difference is choice. One jumbo lender may have an excellent 10% down program but stricter reserve requirements. Another may price a 15% down loan more aggressively or offer greater flexibility with income or assets. Instead of trying to fit every borrower into one bank's guidelines, we can compare multiple options.
How Much Do You Really Need to Put Down?
There's no universal jumbo down payment. The right amount depends on your loan amount, credit, reserves, income, financial goals and the specific jumbo program.
And putting more down isn't automatically better.
On a $1.2 million home, 20% down is $240,000. Putting 10% down is $120,000, leaving an additional $120,000 available for investments, your business, renovations, emergency reserves or other priorities.
For some buyers, 20% down absolutely makes sense. For others, preserving liquidity is more valuable.
When someone asks me, "How much do I need to put down?" my answer is simple: let's compare all the options first, then decide what makes the most financial sense.
Can a Jumbo Loan Actually Be Better Than a Conventional Loan?
Absolutely. A jumbo loan isn't automatically more expensive or less attractive than conventional financing.
Jumbo rates can sometimes be lower than conforming rates. Because jumbo lenders set their own pricing, the best option depends on your loan amount, credit, down payment, reserves and overall financial profile.
Less than 20% down doesn't necessarily mean PMI. Our 10% and 15% down jumbo options can eliminate monthly PMI while allowing qualified buyers to keep more cash available.
Jumbo lenders may also approach higher-net-worth borrowers differently. Investment assets, retirement accounts, multiple income sources, bonuses, RSUs and other parts of a complex financial profile may fit one lender significantly better than another.
Most importantly, the lowest interest rate doesn't automatically mean the best loan structure. I look at the rate, monthly payment, down payment, PMI, cash required at closing, reserves and liquidity remaining after closing.
Sometimes putting more money down for a lower rate is the right move. Other times, keeping $100,000 or more available while accepting a slightly higher payment makes more sense.
That's why we don't start a jumbo conversation by asking, "What's the lowest rate?" We start by asking, "What loan structure makes the most sense for you?"
Physician Jumbo Loans
Physician mortgage programs can be one of the most powerful options in jumbo lending. They're designed for medical professionals who may have significant student debt, limited savings early in their careers or haven't received their first attending paycheck yet.
For qualified physicians and other eligible medical professionals, including MDs, DOs, DDSs, DMDs and PharmDs, we have jumbo options offering as little as $0 down on loan amounts up to $2 million or more. For borrowers with the funds available, putting 5% down can significantly improve the terms, so we typically compare both options side by side.
Physician programs may offer more favorable treatment of student loan debt, allow DTIs of 50% or higher depending on the program, and frequently don't require monthly PMI. They can also provide flexibility with employment contracts, allowing qualifying residents, fellows and new attendings to close before receiving their first paycheck.
Eligibility, loan limits, credit requirements and guidelines vary by lender, which makes matching the physician to the right program especially important.
Feature | Physician Loan | Conforming Conventional Loan |
|---|---|---|
Down Payment | As low as 0% with select programs | As low as 3%, depending on program |
PMI Required | No monthly PMI on many physician programs | Generally required with less than 20% down |
Loan Amount | Up to $2 million+, depending on program | Up to $832,750 |
Student Loans | May offer more favorable treatment | Actual IDR payment may be used; special rules apply to deferred or forbearance loans |
Future Employment | Employment contract may be accepted | Future employment may also qualify under specific conventional guidelines |
DTI | May allow up to approximately 50%, depending on program | Automated underwriting may allow up to 50% |
Interest Rate | Often slightly higher than comparable conventional financing | Often lower, depending on credit, down payment and market conditions |
Cash Required | Can be significantly lower with 0%–5% down | Larger down payment may be needed to stay within the conforming loan limit |
Preserving Cash | Allows physicians to potentially keep more cash available for reserves, investing, moving expenses or other priorities | More cash may be needed to stay within the conforming limit |
Best For | Physicians who want to minimize their down payment, avoid PMI and preserve liquidity | Physicians who fit standard conventional guidelines and don't need the additional flexibility |
A lower interest rate doesn't always mean a better financial strategy. A physician loan may carry a slightly higher rate, but putting little or nothing down, avoiding monthly PMI and preserving cash can make it the better overall option for some physicians.
What Jumbo Lenders Actually Look For
Jumbo underwriting looks at many of the same fundamentals as conventional financing, but guidelines can be more detailed and vary significantly by lender.
Credit history and scores — Many jumbo programs look for a 700+ credit score, although some allow lower scores. Generally, stronger credit opens the door to better pricing and more program options. Some lenders also require multiple established credit tradelines.
Debt-to-income ratio — Many jumbo programs prefer DTI at or below 43%–45%, although some allow higher ratios with the right borrower profile. DTI can also affect pricing. With some of our programs, pricing improves below 43%, adjusts between 43.01%–45%, and may adjust again between 45.01%–49.99%.
Cash reserves — Reserves are the funds remaining after closing, measured in months of your full mortgage payment, including principal, interest, taxes and insurance (PITI). Jumbo programs may require 6–12 months depending on the loan and borrower.
Checking, savings, brokerage and eligible retirement assets may count toward reserves. Some lenders only count a percentage of brokerage or retirement balances, often 60%–70%, rather than the full balance.
Income and employment — Jumbo lenders closely review the stability and documentation of your income. This can become particularly important for executives, business owners and borrowers with multiple income sources.
One important rule: avoid moving large amounts of money between accounts, opening new debt or making major financial changes during the loan process. Keeping your assets and credit profile as clean as possible makes underwriting much easier.
Why Jumbo Rates Can Vary So Much Between Lenders
Jumbo loans don't have one universal rate sheet. Each lender prices based on its own cost of capital, risk appetite, guidelines and current lending capacity.
That means the lender with the best rate for one jumbo borrower may not be the best lender for another.
The Penland Team works with more than 75 jumbo lenders and 2,000+ mortgage products through our delegated and wholesale lending relationships. One lender may have better pricing on a 10% down $900,000 loan, while another may be more competitive on a 15% down $1.2 million loan or a property with acreage.
Our job is to compare the available options instead of forcing your loan into one lender's box.
The Austin Jumbo Appraisal Challenge
Appraisals on higher-priced Austin homes can be more complicated because there may be fewer comparable sales.
Custom construction, acreage, gated communities, waterfront or view properties and off-market sales are common in Austin's luxury market. An appraiser in Lakeway or Westlake may have only a handful of recent MLS sales, and none may closely match the home's size, upgrades, lot or location.
We work with a local appraisal management firm that can proactively communicate with the real estate agents involved to help identify relevant comparable and off-market sales and provide available information to the appraiser while maintaining full appraisal independence.
Higher loan amounts or certain jumbo programs may also require an additional valuation review or second appraisal. Knowing that upfront helps prevent surprises after you're under contract.
Want to know more? Check out my 90-second video explaining how our appraisal process is different.
Why Jumbo Preapproval Matters Before You Make an Offer
A quick online pre-qualification isn't enough for a complex jumbo purchase. Your income, assets, reserves and credit can determine not only whether you qualify, but which jumbo lender is the best fit.
For more complex loans, we offer a TBD pre-approval. That means we can have our in-house jumbo underwriting team review the loan before you've even identified a property. We can identify potential conditions early and, when necessary, pivot to another lender with more appropriate guidelines or flexibility.
Our team typically closes 7–8 jumbo loans every month. That experience helps us identify the small issues that can derail an approval: an RSU that needs additional history, a K-1 income issue or an asset account that triggers an additional reserve requirement.
Finding those issues before you're under contract can make for a much smoother closing.
Alternative Ways to Structure a Higher-Priced Purchase
A traditional jumbo loan isn't always the best answer.
Larger down payment with a conforming first mortgage — Putting enough down to keep the first mortgage at or below $832,750 can keep the loan in conforming territory.
Conforming first + second mortgage — In some cases, we can keep the first mortgage within the conforming limit and use a second mortgage for part of the remaining financing. This can sometimes compete with a traditional jumbo structure.
Physician financing — Eligible medical professionals may have access to 0%–5% down options with higher loan limits.
Bridge strategies — If your down payment is tied up in your current home, a bridge strategy may allow you to purchase before selling.
The best structure depends on your goals, available assets, expected time in the home and overall financial picture.
Why Local Jumbo Experience Matters
Austin's higher-priced market comes with its own challenges: off-market luxury sales, acreage, custom homes, competitive contract timelines and borrowers with complex compensation structures.
After 23 years in this market, our team understands the local agents, property types, appraisal challenges and contract timelines. Just as importantly, our regular jumbo volume gives us experience with the underwriting details that can make or break these loans.
Our approach is simple: review the full scenario upfront, compare multiple jumbo programs and recommend the structure that fits. Not a one-size-fits-all quote. An actual strategy based on your financial situation.
Jumbo Loan FAQs
What is the jumbo loan limit in Austin for 2026?
The 2026 conforming loan limit is $832,750 for a one-unit home in Travis, Williamson and other Texas counties. A loan above that amount is generally considered jumbo (FHFA).
Is a $1 million home automatically a jumbo loan?
No. Jumbo is determined by the loan amount. Put 20% down on a $1 million home and the $800,000 mortgage remains below the conforming limit.
Do jumbo loans require 20% down?
No. We have jumbo programs offering 10% and 15% down, while eligible physician programs can offer 5% or even 0% down.
Can I get a jumbo loan with less than 20% down and no PMI?
Yes. We have jumbo programs offering 10% and 15% down without monthly PMI. Loan limits, guidelines and pricing vary by lender.
Are jumbo rates higher than conventional rates?
Not always. Rates depend on your financial profile and the lender. There are times when jumbo rates are actually lower than conforming rates.
How much do I need in reserves?
Many jumbo programs require 6–12 months of PITI, depending on the loan. Additional reserves, often 3–6 months of PITI, may also be required for other properties you own.
What credit score do I need?
Many jumbo programs look for 700+, although requirements vary and some programs allow lower scores. Stronger credit generally provides more options and better pricing.
Are jumbo loans harder for self-employed borrowers?
Documentation can be more involved, including tax returns, P&Ls and sometimes additional business documentation. Having multiple jumbo lenders gives us more flexibility in finding the right program.
Can physicians get a jumbo loan with little or no down payment?
Yes. We have physician programs with 5% down and select programs offering 0% down for qualifying borrowers.
Ready to Talk?
If you're shopping above the conforming loan limit in the Austin area, let's review your financing before you make an offer. We'll compare jumbo lenders, down-payment options and loan structures based on your financial profile, not a generic rate quote.
The goal is simple: find the jumbo strategy that makes the most sense for you.
About the Author
Josh Penland is the Branch Manager and Senior Loan Officer of The Penland Team at Fairway Home Mortgage. For more than 23 years, he's helped thousands of Texas families buy homes, refinance, and make smarter financial decisions. Josh specializes in helping homebuyers understand the mortgage process, property taxes, and long-term homeownership strategies.
Have a question about a jumbo loan? I'd love to help. Click the link HERE to book a 15-minute intro call.
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