A jumbo loan is any mortgage larger than the conforming loan limit set annually by the Federal Housing Finance Agency (FHFA) — $832,750 in most counties for 2026, higher in expensive metro areas. Because Fannie Mae and Freddie Mac won't buy loans above that limit, jumbo loans are underwritten and held to different (usually stricter) standards by the lender directly.
Who it's best for
Buyers purchasing above the conforming limit — which in high-cost metro areas can mean a fairly ordinary home, not just a mansion. Best suited to borrowers with strong credit (usually 700+), a stable and well-documented income, and enough liquid reserves to satisfy stricter underwriting.
How it's different from a conventional loan
- Bigger down payment, usually. Many jumbo programs want 10-20% down, though some go lower for exceptionally strong borrowers.
- Stricter reserve requirements. Lenders often want to see 6-12 months of mortgage payments in reserve after closing, versus 2 months or less on a typical conventional loan.
- Tighter DTI limits and more thorough income documentation, since the lender is holding all the risk rather than selling the loan.
- Rates can go either way. Jumbo rates aren't automatically higher than conforming rates the way people assume — in some rate environments they're actually lower, since lenders compete hard for these larger, lower-risk-per-dollar loans.
Conforming loan limits change annually and vary by county — high-cost areas have a higher limit than the baseline. Jumbo underwriting overlays vary significantly by lender.