In a mortgage market dominated by “black or white”, “yes or no”, and by-the-book diligence, more and more I am beginning to see some jumbo lenders starting to loosen up and be a bit more intuitive than their government-endorsed or government-insured counterparts.

Most people are familiar with jumbo loans, or loans that exceed the maximum amount set in place by Fannie Mae and Freddie Mac. While the days of having to verify credit and assets only for an approval are long gone, for those able to fully show their self-employed or wage earner income, finance options for jumbo properties is still as robust as ever.

As an example, current conventional and government guidelines now call for a complete dissemination of a borrower’s income. If the borrower shows business expense write offs on their tax returns, those expenses are averaged over two years and are subtracted from the qualifying income. That subtraction of income can easily make or break the approval, depending on the actual amount being expensed. The irony, though, is that these figures are often exaggerated and are a reflection of the rule-bending that occurs when filing personal or business income taxes. However knowing that fact, most jumbo lenders would have it that this expense not be netted off the borrower’s bottom line or qualifying income.

Furthermore, most conventional and government loans do not give borrowers the option to manage their own taxes or hazard insurance. And if the lender does provide the option, there is a charge that is tacked onto their total settlement costs. Thankfully, most jumbo lenders neither force escrows or charge for the option. This way, that money can be managed, accessed, or even invested for the borrower to directly collect interest on.

Lastly, starting February 15, HUD will be implementing their own version of Fannie and Freddie’s Home Valuation Code of Conduct, wherein the order will be assigned independent of the broker initiating it. While I agree that changes must be made to prevent values from being influenced, the execution of HVCC is far from where it needs to be. Thankfully, most jumbo lenders still let brokers not only command the appraisal order process, but most importantly, allow for direct communication with the appraiser–which is itself more valuable than any value they could put down on a report.

Especially with rates and values at historic lows, the most important idea to remember is that there is a right buyer, for the right property, and the right loan option for any situation that is called for, whether it is a small starter home, or a dream mansion. And because jumbo loans are serviced internally and not resold to the GSEs, the less restrictive guidelines for such loan types are now as attractive as the homes they would be used to finance.