Shopping or selling in Arlington and wondering which mortgage lane you fit in? With prices that often sit near or above national thresholds, your loan type can change your rate, down payment, and even your buyer pool. In this guide, you’ll learn how conforming and jumbo loans work, what 2025 limits mean for Arlington, and which strategies help you compete. Let’s dive in.
Conforming loans: the basics
A conforming loan is one that fits size and program rules so Fannie Mae or Freddie Mac can buy it from the lender. The Federal Housing Finance Agency (FHFA) sets the national baseline conforming limit for 2025 at $806,500 and a high‑cost ceiling at $1,209,750. You should always confirm the current year’s exact county limit using the FHFA’s official lookup and announcement page because that number determines whether your loan is conforming or jumbo. Review the FHFA’s 2025 limits and county guidance.
Jumbo loans: when your mortgage is bigger
A jumbo loan is any mortgage that exceeds the applicable FHFA conforming limit for that county. These loans are not purchased by Fannie Mae or Freddie Mac, which means lenders follow their own guidelines and investors, and pricing can differ. For the national context on how conforming limits are set, see Freddie Mac’s 2025 loan‑limit overview.
Why it matters in Arlington
Arlington’s price mix makes this decision real. Local reporting shows many single‑family homes often trade above one million dollars, so jumbo financing is common for detached properties. Recent coverage of policy and market trends notes single‑family medians topping $1.1 million at times, reinforcing the role of jumbos for that segment. See regional context in the Washington Post’s reporting on Arlington’s single‑family market and ARLnow’s snapshot of sales and prices.
Key differences that affect you
Credit, income, and reserves
- Conforming loans follow standard agency guidelines and allow a wide range of borrower profiles.
- Jumbo loans usually require higher credit scores, tighter debt‑to‑income ratios, and more documentation of income and assets. Lenders often want larger cash reserves, sometimes 6 to 12 months of payments. Learn what to expect with this jumbo loan overview.
Down payment and PMI
- Conforming loans can work with low down payments. If you put less than 20 percent down, private mortgage insurance (PMI) is typically required, and it can usually be removed once you reach 20 percent equity. See how PMI works on Fannie Mae’s consumer page.
- Jumbo loans are not part of the Fannie Mae or Freddie Mac PMI framework. Many lenders offset risk through larger down payments, stronger reserves, or pricing adjustments.
Rates and fees
- There is no fixed rule on which is cheaper. Sometimes jumbo rates run higher than conforming, and sometimes they are similar or even lower based on investor demand and lender strategy. The spread changes over time, so compare quotes and the full APR. For a current perspective on how jumbo rates can move relative to conforming, see this rate comparison explainer.
- Jumbo loans may involve stricter appraisal requirements and different fee structures. Always compare total closing costs, not just the headline rate.
Buyer playbook for Arlington
- Check your price target against the FHFA county limit to see if your loan would be conforming or jumbo. Start with the FHFA’s 2025 loan‑limit announcement and county guidance.
- If you are likely in jumbo territory, get preapproved early with a lender experienced in DC‑area jumbo loans. Ask about required credit scores, reserves, and documentation. This jumbo primer outlines typical expectations.
- Compare at least two full loan estimates that show APR and itemized fees. Rate spreads can shift, so shop strategically and be ready to lock when terms align with your goals.
- If you are putting less than 20 percent down on a conforming loan, factor PMI into your monthly payment and plan for removal when you reach sufficient equity. Review the basics on Fannie Mae’s PMI page.
- If you qualify, you might also explore FHA or VA options for lower down payments. For FHA context, review HUD’s 2025 loan‑limit update.
Seller takeaways in a high‑cost market
- Pricing above the conforming limit narrows the pool to buyers who meet jumbo requirements. That can still be a strong pool in Arlington, yet it changes the offer landscape and timelines.
- If market data supports it, pricing within conforming limits can expand access to buyers using lower‑down‑payment conventional financing.
- Align your pricing, presentation, and timing with neighborhood‑level data so you attract the right buyers with the right financing.
Examples by property type
Scenario A: Condo or townhouse near the limit
If you are shopping condos or townhomes near the baseline limit, a conforming loan may fit. With less than 20 percent down, budget for PMI and plan for removal as your equity grows. Eligible buyers can also compare FHA or VA to optimize monthly payments and cash to close.
Scenario B: Single‑family purchase above $1M
For many detached homes in Arlington, expect jumbo underwriting. You will likely need a higher credit score, stronger reserves, and a larger down payment. Get a jumbo preapproval before touring so you can move quickly and negotiate with confidence. Use this jumbo guide to understand typical requirements.
Scenario C: Seller weighing price strategy
If your target price sits near the conforming threshold, understand how a small shift can change the buyer pool. Pair market‑supported pricing with premium presentation to maximize reach and results. Confirm the current county limit via the FHFA’s loan‑limit page and discuss how it intersects with neighborhood demand.
Alternatives and smart structures
- Piggyback financing. Some buyers use an 80‑10‑10 structure to manage PMI or loan size. It is specialized and not for everyone, but it is worth a conversation with your lender. Learn more about piggyback loans.
- Portfolio jumbo programs. Local and national banks sometimes hold jumbo loans and offer flexible underwriting for strong borrowers. See an example of bank‑held jumbo programs on Bank of America’s jumbo page.
- Adjustable‑rate options and points. In some markets, adjustable‑rate jumbos or buying points can improve initial payments. Compare APRs and understand reset risk before you commit.
Final thoughts
Choosing between conforming and jumbo financing in Arlington comes down to price point, credit profile, and the tradeoffs you want to make on cash, rate, and flexibility. With strong preparation and the right lending partner, you can compete confidently at any price tier. If you want local guidance on how financing intersects with neighborhoods, presentation, and timing, connect with Diana Foster Real Estate to plan your next move.
FAQs
What are conforming loan limits and how do I check Arlington’s number?
- The FHFA sets annual conforming loan limits that vary by county. Start with the FHFA’s 2025 limits announcement to confirm the current baseline and your county’s specific cap.
Are jumbo mortgage rates always higher than conforming rates?
- No. The spread changes with investor demand and lender strategy. Sometimes jumbos are higher, sometimes similar, and occasionally lower. Compare live quotes and full APRs using resources like this rate comparison explainer.
What credit score and reserves do I need for a jumbo in Arlington?
- Requirements vary by lender, but jumbos often call for higher scores, tighter debt‑to‑income ratios, and several months of cash reserves. Review common expectations in this jumbo overview.
How does PMI work if I put less than 20 percent down on a conforming loan?
- Conforming loans typically require PMI with under 20 percent down, and it can usually be removed when you reach 20 percent equity. See details on Fannie Mae’s PMI page.
As a seller, how does pricing near the conforming limit affect my sale?
- Listing above the limit narrows your buyer pool to jumbo‑qualified borrowers, while pricing within the limit can broaden access to conforming buyers. Confirm the current county cap via the FHFA’s 2025 guidance and align pricing with neighborhood demand.
