What Is a Jumbo Loan?

Another name for a Jumbo Mortgage is a Non-Conforming mortgage. This is a loan a lender makes you that doesn’t “conform” to the guidelines of Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, which gives lenders access to cash to create additional mortgages.

Fannie Mae and Freddie Mac only buy mortgages that meet their guidelines for down payment, credit score, post-closing reserves, and loan amounts.

In 2021, the conforming loan size limit for a one-unit home is $548,250 nationwide, but can go higher in certain high-priced markets.

Loans greater than these limits are usually called Jumbo Mortgages, but can also be called Non-Conforming mortgages.

Jumbo Loan Graphic

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