A jumbo loan, also known as a jumbo mortgage, is a type of financing that exceeds the limit set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, a jumbo loan is not eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. It is designed to finance luxury properties and homes in highly competitive local real estate markets. Jumbo mortgages come with unique underwriting requirements and tax implications. These kinds of mortgages have gained traction as the housing market continues to recover following the “Great Recession”.
The limit was increased from $453,100 in the year 2018 to $484,350 as in 2019 for most of the country. While for counties that have higher home values, the baseline limit is set at $726,525, or 150% of $484,350.