A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional
conforming loan. The maximum amount for a conforming loan is $766,550 in most counties, as determined by
the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a
jumbo loan.
Also called non-conforming conventional mortgages, jumbo loans are considered riskier for lenders
because these loans can't be guaranteed by Fannie and Freddie, meaning the lender is not protected from
losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or
an adjustable rate, and they come with a variety of terms.
