A jumbo mortgage, or jumbo loan, is a type of home mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). In most parts of the U.S. in 2025, this limit is $806,500. Mortgages above this amount require a jumbo loan because they cannot be purchased, guaranteed, or securitized by government-sponsored enterprises like Fannie Mae and Freddie Mac
. Jumbo loans are typically used to finance luxury properties or homes in high-cost real estate markets. Because they are not backed by these agencies, lenders consider jumbo loans riskier and impose stricter qualification criteria, including higher credit scores, larger down payments, and lower debt-to-income ratios. Interest rates on jumbo loans are usually higher than on conforming loans, though this can vary
. Unlike conforming loans, jumbo loans generally remain on the lender's books rather than being sold on the secondary market, making them a type of portfolio loan. They can be used for primary residences, investment properties, or vacation homes
. In summary, a jumbo mortgage is a nonconforming loan exceeding government- set limits, designed for borrowers purchasing high-value homes, with more stringent requirements and potentially higher costs than conventional loans.
