After getting estimates from three or four lending institutions, many people realize that loan choices in San Francisco operate differently than in other areas. The reason is simple. The market prices are so high that the criteria for choosing a program shifts from the down payment ratio to whether it exceeds the loan limit.

The median sale price in San Francisco was $1.5 million last month according to Redfin, and the average for the entire county has reached $1.8 million over the past three months. The average home value reported by Zillow is also around $1,393,773. San Francisco County is designated as a top high-cost area by the FHFA, and even though the core loan limit will rise to $1,249,125 in 2026, the median sale price far exceeds this limit, which is a unique characteristic of this area.

In simpler terms, this means that jumbo loans are typically associated with most purchases in San Francisco. A jumbo loan applies to amounts that exceed the loan limit, and it usually requires a higher credit score than conventional loans, often expecting a score of 700 or above and a down payment of 10% to 20%. When comparing various lending institutions, you will find that the interest rates and requirements for jumbo loans can vary significantly from bank to bank, and this difference can greatly affect the total repayment amount, making it worthwhile to consult multiple places.

If the property falls within the loan limit, such as a condo or a small house in the outskirts, a conventional loan may be sufficient. If the down payment is less than 20%, PMI will apply, but once the equity exceeds 20%, it can be canceled. If the terminology is unfamiliar, think of it this way: the insurance premium you pay monthly gradually disappears as you pay off part of the home price.

FHA loans are relatively underutilized in San Francisco. While the advantage of being able to purchase with a 3.5% down payment exists, the high market prices lead to larger loan amounts and increased mortgage insurance costs, making the benefits less significant compared to jumbo or conventional high-balance loans.

If you are looking for school districts preferred by Korean families, areas like Sunset or Richmond are often mentioned. However, school district boundaries change frequently, so it is advisable to refer to GreatSchools ratings and verify the assigned school for the specific address before making a purchase. For families coming from out of state, it is also helpful to ask about California's property tax assessment methods and insurance costs, which differ from their previous residence, during consultations with lending institutions.

For investors seeking rental income, San Francisco is an attractive yet challenging market. While rental prices are high, the purchase prices are equally high, so it is essential to carefully evaluate whether the rental yield can cover the loan repayment amount. Investment properties are not eligible for FHA or VA loans, and conventional loans typically require a higher down payment than for primary residences, so it is necessary to compare the conditions of investment products from various lending institutions.

Families who have just immigrated from Korea may find it challenging to get loan approval due to a lack of credit history in the U.S. In such cases, finding lending institutions that recognize rental payments or utility payment histories as alternative credit data can be a solution, and especially in the high-priced market of San Francisco, it is beneficial to obtain pre-approvals from multiple places and compare conditions.

Jumbo loans, in particular, can vary significantly in terms of required documentation and processing speed from one lending institution to another. It is almost essential in this area to ask in advance about income verification methods and the time it takes to close, and to obtain pre-approval before making an offer. Following these procedures in a timely manner can give you an advantageous position in the competitive market.

The market prices and loan limits discussed in this article are based on reference point data, and specific conditions may vary depending on the lending institution and individual circumstances. This is not investment or legal advice, so it is advisable to consult with a professional before finalizing any contracts.