What is a jumbo loan?
A jumbo loan (also known as a non-conforming loan) is a home loan that exceeds the maximum Federal Housing Administration (FHA) limit. Jumbo loans are not guaranteed by Fannie Mae or Freddie Mac, which means that the lender has no protection in the event that the borrower defaults. The maximum limit depends on the location of the home and what the conforming loan limit is for that area. Typically, more expensive areas of the country have higher conforming loan limits. Learn the 5 jumbo loan basics every borrower should know.