Jumbo Loan

A “jumbo mortgage” is called ‘non-comforming’ because it is larger than the home loan limits Fannie Mae and Freddie Mac are willing to back, or guarantee, because they are considered riskier than home loans under this amount. This can make it harder to land a mortgage depending on overall credit conditions.

As of 2009, any loan amount at or above $417,000 was considered a jumbo loan, although there are some adjustments for more expensive regions of the country. The limits are set by the Office of Federal Housing Enterprise Oversight (OFHEO).

A mortgage above $750,000 is a “super jumbo.” Jumbo loans have slightly higher rates than conforming loans and often cannot be sold off by the lender to mortgage investors.

Posted in Refinance Glossary.