Jumbo Loans
A jumbo loan exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. As of 2026, that limit is $832,750 for a one-unit home in most of the country, and up to $1,249,125 in designated high-cost areas (the FHFA updates these figures every year). Rates tend to be slightly higher on jumbo loans because lenders take on more risk.
Jumbo loans are commonly used to finance luxury properties or homes in competitive markets where prices exceed standard limits. Because they are not backed by Fannie Mae or Freddie Mac, lenders often have stricter requirements: higher credit scores, larger down payments, and strong income documentation.
Jumbo Loan Characteristics
Exceeds the conforming loan limits, making it larger than most standard mortgages
Typically higher interest rates than conforming loans due to added lender risk
Not guaranteed or insured by government-sponsored enterprises
Usually requires a higher credit score
Often requires a larger down payment, sometimes 20% or more
Strong income documentation and financial stability typically required
Commonly used for luxury homes or high-cost markets
Approval can be more stringent and time-consuming than a standard mortgage
5) Conventional loans offer options for fixed or adjustable interest rates
6) Conventional loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
7) Conventional loans do not require mortgage insurance if the borrower puts down at least 20% of the purchase price
8) Conventional loans offer options for refinancing, including cash-out refinancing and rate-and-term refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
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