Jumbo Loans in Dallas: What Buyers Should Know

Shopping in Preston Hollow or the Park Cities and wondering if you’ll need a jumbo loan? You’re not alone. Many homes in these neighborhoods are priced above standard lending limits, which changes how you qualify and the type of mortgage that makes sense for you. In this guide, you’ll learn what counts as a jumbo in Dallas County, how underwriting works, and how to prepare a strong application that fits your timeline and lifestyle. Let’s dive in.

What counts as a jumbo in Dallas County

A jumbo loan is any mortgage that exceeds the local conforming loan limit set each year by the Federal Housing Finance Agency. For the most recently published year, the single‑family conforming limit is $766,550. Dallas County is not a designated high‑cost county, so the baseline limit applies here.

If you are buying a single‑family home in Preston Hollow or the Park Cities above that limit, your mortgage will likely be a jumbo. For 2‑ to 4‑unit properties, conforming limits are higher than for single‑family, but most luxury buyers in these neighborhoods are focused on single‑family homes. Since the FHFA updates limits annually, you should confirm the current limit for the year you plan to close.

FHA, VA, and USDA programs have their own rules and limits. In many high‑price Dallas purchases, those programs are less common because of price caps or program restrictions.

How jumbo underwriting differs

Jumbo loans follow lender and investor rules rather than standard agency rules. That means higher expectations in a few areas and a closer look at your overall financial picture.

Credit and rates

• Lenders often look for a 740+ credit score for the best pricing.
• Many programs accept 700 to 740 with modest pricing or term tradeoffs.
• Sub‑700 can be possible, but rates and terms are usually less favorable.
• For well‑qualified buyers, jumbo rates can sit within a few tenths of a percent of conforming rates. If risk is higher, the spread grows.

Down payment and loan‑to‑value

• Conforming loans can allow down payments as low as 3 to 5 percent, depending on the program.
• Many jumbo lenders expect 10 to 20 percent down. The most competitive programs often start at 10 to 15 percent.
• For loan amounts above $1 to $2 million, 20 percent or more down is common.
• Some 90 percent loan‑to‑value jumbo options exist, but they are less common and require very strong qualifications.

Cash reserves

Jumbo lenders will ask you to show funds left over after closing, measured in months of PITI (principal, interest, taxes, insurance). Expect 6 to 12 months for many loans and 12 to 24 months for higher‑priced or more complex files. Reserves can include cash, brokerage accounts, retirement accounts with documentation, and sometimes proceeds from the sale of another property.

Debt‑to‑income and income documentation

• Many lenders cap debt‑to‑income ratios at 43 to 50 percent for well‑qualified borrowers.
• Full documentation is standard. Plan to provide recent pay stubs, W‑2s, and two years of tax returns.
• Self‑employed buyers often provide two years of returns and profit and loss statements. Some lenders offer bank‑statement jumbos that use 12 to 24 months of statements in place of tax returns.

Asset sourcing and seasoning

Large deposits need clear paper trails. Lenders confirm that down payment funds are not borrowed unless allowed by an approved gift program. Retirement accounts used as reserves may need statements and notes on how you would access funds if needed.

Appraisals and valuation

Luxury homes often have fewer direct comparables. Appraisals can take longer and cost more, and appraisal waivers are uncommon on jumbo loans. Some lenders may require two appraisals or a second opinion when comps are limited or adjustments are large.

HOA and property type considerations

If you are buying a condominium or a property with an HOA, lenders will review the association’s financials, reserves, and any litigation. Unique properties, estates with acreage, or homes with significant renovations may need a specialist appraiser or additional insurance depending on the parcel.

Rate dynamics and loan products

Jumbo pricing is driven by lender funding costs, investor appetite, and credit risk. It does not rely on the same agency securitization as conforming loans, so products and pricing vary more from lender to lender.

Fixed, ARMs, and interest‑only

• Conventional fixed‑rate jumbos in 30‑ and 15‑year terms offer payment stability and are the most common choice for long‑term holds.
• Adjustable‑rate mortgages such as 5/1, 7/1, and 10/1 can start with lower initial rates. They can be a fit if you expect to refinance or sell within the fixed period.
• Interest‑only options are sometimes available from portfolio lenders. They can help manage cash flow for sophisticated buyers but bring more qualifying scrutiny.

Portfolio and bank‑statement options

Portfolio and non‑QM lenders offer flexibility for self‑employed buyers and high‑net‑worth clients with complex income. Bank‑statement or asset‑based programs can use 12 to 24 months of statements to verify income. Pricing tends to be higher than agency‑style jumbo programs that mirror conforming rules.

Timing and the rate spread

For strong files, the spread between conforming and jumbo rates is often modest. For lower scores, high loan‑to‑value, or non‑standard income, pricing spreads widen. In Dallas, local bank portfolio lenders sometimes provide competitive terms or flexibility for relationship clients, which can help with executive relocations or time‑sensitive closings.

Local insights for Preston Hollow and the Park Cities

Why jumbos are common here

Preston Hollow and the Park Cities have many high‑value single‑family homes and estates. Prices often exceed the county’s conforming limit, so jumbo financing is a regular part of the buying process. Fewer comparable sales at the top of the market can stretch appraisal timelines. Cash purchases are more frequent in luxury segments, but many relocating buyers still use financing to preserve liquidity or align with corporate relocation policies.

Certain parcels may include private roads, amenities, or HOA factors that matter to insurers and lenders. If a property has unique features or acreage, tell your lender early so appraisal and underwriting can plan for it.

Real‑world scenarios

• Relocating executive: Strong credit above 760, W‑2 income, 20 percent down, and 12 months of reserves can qualify for competitive jumbo pricing with a smooth underwriting path.
• Upsizer buying before selling: If sale proceeds are not yet available, you may need proof of a sale contract or additional reserves. Bridge financing can help you purchase the next home before your sale closes.
• Self‑employed buyer at the $2 million price point: You can use standard tax‑return documentation or consider a bank‑statement jumbo. Lenders weigh reserves heavily and may require a larger down payment.

How to prepare for a jumbo pre‑approval

Getting organized early can save you time and stress once you find the right home.

• Confirm price and loan limits: Compare your target price with the current conforming limit for your closing year.
• Credit prep: Pull your credit, correct errors, and aim for 740+ for best pricing.
• Down payment plan: Document where funds come from. Gather bank statements, sale contracts, or gift letters if applicable.
• Build reserves: Collect statements showing 6 to 12 months of PITI. High‑priced loans or complex income may need 12 to 24 months.
• Income documents: Have 30 days of pay stubs, W‑2s, and two years of tax returns ready. If self‑employed, prepare two years of returns and P&Ls, or 12 to 24 months of bank statements if using a bank‑statement program.
• Asset documentation: Keep 60 to 90 days of history for large deposits and transfers. Include retirement account statements if using them as reserves.
• Property details: Share the MLS sheet, seller disclosures, and HOA information with your lender. Flag unique features or acreage early for appraisal planning.
• Timing and product fit: Discuss bridge options if you need to buy before you sell. Decide whether a fixed or adjustable loan suits your timeline.
• Communicate compensation: If your pay includes stock or RSUs, tell your lender so they can document it correctly.

Strategies to strengthen your offer

• Get a thorough pre‑approval: Jumbo sellers often prefer buyers with full documentation reviewed by underwriting.
• Choose the right lender fit: Compare national lenders, local banks, and mortgage brokers. Responsiveness, in‑house appraisal ordering, and local closing experience can matter as much as headline rates.
• Prepare for appraisal: If the home is unique, build in realistic appraisal time and be ready if the lender requests a second opinion.
• Align loan product with plans: If you expect to move, sell, or refinance within a set period, a well‑priced ARM can reduce your early‑years payment.

Work with a local advisor you trust

Buying in Preston Hollow or the Park Cities means navigating jumbo rules, appraisal nuance, and local lender expectations. You deserve clear advice and a smooth process. With deep neighborhood roots and access to Compass programs such as Coming Soon, Concierge, and Bridge Loan, you can align financing timing with your move and present a strong offer without unnecessary stress.

If you are planning a purchase this year, reach out to discuss budget, timelines, and loan options that fit your goals. When you are ready, connect with Marla Sewall to schedule a personal consultation.

FAQs

What is a jumbo loan in Dallas County?

• A jumbo loan is any mortgage above the county’s conforming limit for the year. Dallas County follows the baseline single‑family limit, so many Preston Hollow and Park Cities homes require jumbo financing.

How much more do jumbo rates cost?

• For strong borrowers, the premium over conforming can be small, often a few tenths of a percent. For higher‑risk files or non‑standard income, the spread can reach several tenths to 1 percent or more.

Can I get a jumbo loan with 10 percent down?

• Yes. Many lenders offer 10 percent down jumbo options for well‑qualified buyers. Terms vary, and higher loan amounts often require 20 percent or more.

How many months of reserves do I need for a jumbo?

• Many lenders ask for 6 to 12 months of PITI in reserves. Larger loans, unique properties, or complex income can require 12 to 24 months.

Are appraisals harder for luxury homes in Preston Hollow?

• Often yes. Fewer comparable sales and custom features can lengthen timelines, increase costs, and sometimes trigger a second appraisal.

Should I use a local bank or a national lender for a jumbo?

• Both can work. Local banks and credit unions may offer portfolio flexibility and relationship pricing. National lenders may have broader product menus and competitive rates. Responsiveness and local closing experience matter.

I am relocating with RSUs and bonuses. Can I qualify?

• Many lenders work with executive compensation, but documentation varies. Share full details early so the lender can verify income and reserves according to program rules.