Mortgage Basics
What Is a Jumbo Loan?
A jumbo loan — also called a non-conforming loan — is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because jumbo loans cannot be sold to Fannie Mae or Freddie Mac, lenders retain the full risk and apply stricter qualification standards.
Conforming Loan Limits
For 2024, the conforming loan limit is $766,550 for a single-family home in most U.S. counties. High-cost areas (parts of California, New York, Hawaii, and Alaska) have higher limits, up to $1,149,825. Any loan exceeding these limits is a jumbo loan.
Jumbo Loan Requirements
Credit score: typically 700–720 minimum (740+ for best rates)
Debt-to-income ratio: usually below 43%
Cash reserves: often 12+ months of mortgage payments
Down payment: 10–20% or more (no low-down-payment programs)
Cannot be sold to Fannie Mae or Freddie Mac — lender holds the loan
Rates: historically higher than conforming; gap has narrowed in recent years
Real Estate Exam Key Points
Jumbo loans exceed FHFA conforming loan limits
They are non-conforming — cannot be sold to Fannie Mae or Freddie Mac
Stricter qualification: higher credit, income, and reserve requirements
FHFA sets conforming limits annually
Jumbo loans have no government backing — private lenders bear full risk
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