A jumbo loan is a type of mortgage that exceeds the loan limitations set by Fannie Mae and Freddie Mac. Thus, unlike a conventional loan, these type of mortgages can’t be purchased or securitized by these two entities.
Jumbo loans are common when purchasing luxury homes, or homes in expensive areas, due to their high price points. For 2019, the limit for a loan to be considered jumbo is:
- $484,350 for a single-family homes in most areas of the country
- $726,525 for eligible areas deemed to have higher home values, such as Washington D.C.