Jumbo Loan Program

Sky is the Limit

A jumbo mortgage is a mortgage loan in an amount above conventional conforming loan limits.


"What is a Jumbo Loan?" | Jumbo Loan Experts

A jumbo loan is a form of financing that exceeds the limits set by the Federal Housing Finance Administration (FHFA). Unlike traditional mortgages, jumbo loans cannot be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in the highly competitive local real estate market, Jumbo mortgages come with unique underwriting requirements and tax implications. This type of mortgage is gaining momentum as the housing market continues to recover from the Great Recession.

Jumbo mortgage values ​​vary from state to state and even county to county. The FHFA sets compliant credit limits for various areas each year. The 2022 limit is set at $647,200 in most countries. This was an increase of $98,950 from the 2021 cap of $548,250. For counties with high home prices, the base cap is $970,800, or 150% of $647,200.

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How Jumbo Loans Work

If you're looking at a home close to $500,000 or more and don't have that much in your bank account, you probably want a jumbo mortgage. Also, when seeking a mortgage, homeowners face far more stringent loan requirements than applying for a traditional loan. This is because there is no guarantee from Fannie Mae or Freddie Mac, so jumbo loans carry greater credit risk to lenders. Also, the more money involved, the higher the risk.

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Jumbo Loan | Key Takeaways

  • A jumbo loan is a type of loan that exceeds limits set by the Federal Housing Finance Agency and cannot be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac.
  • Homeowners must meet stricter credit requirements than those applying for traditional loans.
  • Approval requires excellent credit and a very low debt-to-income ratio.
  • The average APR for a jumbo mortgage is often the same as a traditional mortgage, but the down payment represents about 10% to 15% of the total purchase price.