A jumbo mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA) and cannot be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac.
Jumbo mortgages are designed to finance luxury properties and homes in highly competitive local real estate markets and have unique underwriting requirements and tax implications.
The primary advantage of a jumbo loan is that it allows borrowers to take out a mortgage that exceeds the limits put in place by the FHFA. This limit varies by state and county.
For example, in 2024, the limit is $766,550 for most of the country, with higher limits in certain high-cost counties. In areas like Alaska, Guam, Hawaii, and the U.S. Virgin Islands, the baseline limit for a jumbo loan can be $1,149,825 or even higher in counties with elevated home values.
If you are eyeing a home with a price close to half a million dollars or more and do not have that amount readily available in your bank account, you would likely need a jumbo mortgage.
NMLS#70160