A loan is considered jumbo if it exceeds the “conforming” loan limit set annually by Fannie Mae and Freddie Mac, the government-sponsored agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders.
The current conforming loan limit for a single-family home or condominium in most areas of the country is $417,000, with higher limits allowed for designated high-priced real estate markets. Jumbo loans are available for primary homes, secondary or vacation homes, investment properties and condominiums.
A variety of jumbo loan options are available, such as 30-year fixed mortgages, adjustable rate mortgages, and VA loans.
Key elements of jumbo mortgages:
- The ability to purchase a home in a high-priced area
- Relatively low down payment requirements for high salaries
- Ability to rapidly build credit through regular loan payments