Jumbo Loans

A jumbo loan, or jumbo mortgage is a mortgage loan that exceeds the limit set by the Federal Housing Finance Agency (FHFA). Jumbo loans cannot be secured by the government-sponsored Fannie Mae or Freddie Mac, which make these loans risker for lenders.

Fannie and Freddie set limits on how high your mortgage can be-they’re called confirming loan limits. Mortgages that fall under the limit have insurance that protects the lender. Jumbo loans are sometimes called non-conforming loans because they go above this limit.

Conforming loan limits vary by state and market. In 2021, the conforming loan limit for Central Florida was changed to $548,250 for a single-family unit. If the amount of money you borrower goes above that limit, your loan automatically becomes a Jumbo loan.

Jumbo loans typically have much higher down payment requirements compared to conventional loans. These mortgages are riskier than conventional or government-backed mortgages because they don’t have insurance, so many times the rates are slightly higher.