A Jumbo loan is a mortgage that exceeds the conforming loan limits set annually by the FHFA. These loans are common in expensive regions and can be used for primary homes, second homes, or investment properties. Loan amounts can range into the millions depending on the lender and structure.

Functionally, Jumbo loans look similar to conventional mortgages: fixed or adjustable rates, multiple term options, and standard amortization. The key difference is risk. Because Jumbo loans aren’t backed by Fannie Mae or Freddie Mac, lenders apply stricter underwriting. To qualify, borrowers typically need strong credit, manageable monthly debts relative to income, and a meaningful down payment along with solid cash reserves.