Jumbo Loan

In the US, a jumbo loan is a mortgage that is bigger than the dollar ceiling on standard (or conforming) loans as set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). These two US government-sponsored agencies buy conforming mortgages from mortgage lenders and securitise them. Jumbo loans are not eligible for purchase. They are typically granted to applicants with high credit (FICO) scores and with bigger initial deposits and accredited savings, but they typically come with higher mortgage rates.