Jumbo Loan
A mortgage that exceeds the conforming loan limit and therefore cannot be sold to Fannie Mae or Freddie Mac.
Jumbo loans pick up where conforming and high-balance conforming leave off. They're held on lender balance sheets or sold to private investors and securitizers, so each lender sets its own jumbo guidelines within broad market norms.
Underwriting on jumbos is typically stricter, higher credit-score thresholds (often 700 or above), lower maximum DTI, and bigger reserves measured in months of full PITI payments. Down payment requirements range from 10% to 25%+ depending on loan amount and borrower profile.
Jumbo pricing varies more between lenders than conforming pricing because there's no single secondary-market benchmark. Shopping multiple jumbo lenders frequently turns up rate differences large enough to justify the time spent.
Related terms
Other terms you'll see alongside Jumbo Loan
A conventional loan whose amount falls within the limit eligible to be purchased by Fannie Mae or Freddie Mac.
A conforming loan in a designated high-cost area that exceeds the standard conforming limit but stays within a higher local ceiling.
A mortgage that doesn't meet the Qualified Mortgage standards set by federal regulation, often used for self-employed borrowers or non-standard income.
Liquid funds the borrower must have available after closing, measured in months of full PITI payment.
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