Why Is My Down Payment Higher?
Some loan programs have a maximum loan amount they can finance. This is called the loan limit.
When the home's purchase price is above your program's loan limit, your lender cannot finance the entire amount—even if you otherwise qualify.
Instead, you'll need to make up the difference with additional cash at closing.
Example
Let's say:
Home Price: $900,000
Loan Program Limit: $800,000
Even if your loan program normally allows a 5% down payment, the lender can still finance only up to the program's maximum loan amount.
That means you'll need to bring:
Your required down payment plus
The amount above the loan limit
This increases your Total Cash Needed and often results in a much higher effective down payment.
Why Padzilly Shows This Alert
Padzilly automatically checks the loan limits for your financing program and the county where the property is located.
If the home's price exceeds that limit, we'll let you know because it affects:
Your required down payment
Your Total Cash Needed
Whether the home fits comfortably within your budget
Can I Reduce the Cash Needed?
Sometimes, yes.
Try using OfferPro to explore different scenarios, including:
Lowering the offer price
Increasing seller contributions (when allowed)
Adjusting your down payment
Running AutoQualify to automatically find combinations that may better fit your approval
Why Loan Limits Exist
Loan limits are established for many mortgage programs, including:
Conventional loans (Fannie Mae & Freddie Mac)
FHA loans
VA loans (when applicable)
Other government-backed financing programs
The limits vary by loan program and county, so the same borrower may have different maximum loan amounts depending on where they're buying.
Remember
A higher down payment caused by a loan limit does not necessarily mean you don't qualify for the home.
It simply means your loan program can finance only up to its maximum loan amount, so you'll need additional funds to purchase a higher-priced property.
Padzilly highlights this automatically so you can make informed decisions before submitting an offer.