A jumbo loan is a type of mortgage designed to finance properties that exceed the price limits of a standard conforming loan.

In most counties, the Federal Housing Finance Agency (FHFA) sets the maximum conforming loan limit at $766,550. Any home priced above this threshold requires financing through a jumbo loan.

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Also known as non-conforming conventional mortgages, jumbo loans carry higher risk for lenders because they are not backed by Fannie Mae or Freddie Mac. Without this federal guarantee, lenders have greater exposure if the borrower defaults.

 

Jumbo loans are typically offered with fixed or adjustable interest rates and are available in a range of term options.