What is the Loan Limit in LA County? (Conforming vs. Jumbo)

In most of the country, a "million-dollar home" is a mansion. In Los Angeles, it’s a 3-bedroom fixer-upper in a decent school district.

Because home prices in LA are so much higher than the national average, the rules for getting a mortgage are different here, too. If you are shopping for a home in Los Angeles County, you need to understand the Conforming Loan Limit.

This specific number dictates whether your loan is "standard" (easy, cheap) or "Jumbo" (harder, stricter).

Here is the breakdown of the 2024 loan limits and what they mean for your wallet.

The Magic Number: $1,149,825

For 2024, the Federal Housing Finance Agency (FHFA) raised the loan limit for high-cost areas like Los Angeles County.

• The Conforming Loan Limit (High-Balance): $1,149,825

What Does This Mean?

If your loan amount (not the purchase price) is $1,149,825 or less, your mortgage is considered a "Conforming High-Balance" loan.

• The Benefit: These loans are backed by Fannie Mae and Freddie Mac. This means lenders are eager to give them out. They come with lower interest rates, easier qualification standards, and lower down payment requirements (often as low as 5%).

Crossing the Line: The "Jumbo" Loan

If you need to borrow $1,149,826 or more, you have officially entered Jumbo Loan territory.

A Jumbo loan is not backed by the government. The bank is lending you its own money and taking on all the risk. Because of that risk, the rules get stricter.

The Implications of Going Jumbo:

1. Higher Down Payments: While you can get a conforming loan with 5% or 10% down, Jumbo loans often require 20% down (or more).
2. Stricter Credit Requirements: You usually need a FICO score of 700 or 720+ to qualify for the best Jumbo rates. Conforming loans might accept scores as low as 620.
3. Cash Reserves: Lenders want to see that you have money left over after closing. For a Jumbo loan, they might require you to show 6 to 12 months of mortgage payments sitting in liquid cash (savings, stocks, etc.).
4. The Rate Difference: Historically, Jumbo rates were higher than conforming rates. However, in today's weird market, Jumbo rates are sometimes lower than conforming rates because banks want to attract high-net-worth clients. Always compare both.

The "Gap" Strategy: Avoiding Jumbo

Let’s say you are buying a home for $1.5 million.

• You have $300,000 for a down payment (20%).
• You need a loan of $1.2 million.

This puts you just barely into Jumbo territory ($1.2M > $1.149M). You might face stricter scrutiny.

The Fix: You can structure the financing to stay "Conforming."

1. Increase the Down Payment: If you can scrape together another $51,000, you can bring the loan amount down to $1,149,825.
2. The "Piggyback" Loan (80/10/10):
   • 1st Mortgage: Take out a conforming loan for $1,149,825 (or lower).
   • 2nd Mortgage (HELOC): Take out a smaller second loan for the difference.
   • Down Payment: Pay the rest in cash.
   • Result: You get the safety and ease of a conforming loan for the bulk of the debt, avoiding the Jumbo strictness.

The Bottom Line

In Los Angeles, the $1,149,825 mark is a critical threshold.

• Below it: Financing is flexible and standard.
• Above it: You need stronger credit, more cash reserves, and a larger down payment.

Before you start shopping, ask your lender: "Does my budget keep me in Conforming limits, or am I shopping for a Jumbo loan?" The answer will change your strategy.