---
title: What are reserves and why are they required for some loan products?
description: Reserves are funds available to you after close of escrow or after you have paid your down payment and closing costs. Reserves are required for jumbo loans.
---

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# What are reserves and why are they required for some loan products?

## Reserves are funds available to you after close of escrow or after you have paid your down payment and closing costs

Reserves are funds available to you after close of escrow or after you have paid your down payment and closing costs. The amount of reserves required varies depending on the type of loan. 

Many**[conforming loan](https://www.jvmlending.com/glossary/#conformingloan)** programs require no reserves at all, while some **[jumbo loan](https://www.jvmlending.com/loan-types/jumbo-loan/)** programs (for larger loan amounts) require substantial reserves. Most investment properties, second homes, and multi-unit properties will require reserves.

Some investors will discount retirement accounts when used towards a reserve requirement, due to early withdrawal penalties associated with these funds.

Reserves  protect lenders by giving them the peace of mind that you have the funds to continue paying your mortgage in case of a medical emergency, job loss, etc.

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