what is a jumbo loan 
a jumbo loan also known as a jumbo mortgage is a type of financing that exceeds the limits set by the federal housing finance agency fhfa unlike conventional mortgages a jumbo loan is not eligible to be purchased guaranteed or securitized by fannie mae or freddie mac 1jumbo mortgages are designed to finance luxury properties and homes in highly competitive local real estate markets and have unique underwriting requirements and tax implications these kinds of mortgages gained traction as the housing market recovered following the great recession advantages of a jumbo loanthe 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 even by county the fhfa sets the conforming loan limit size for different areas on an annual basis the limit for 2024 is set at 766 550 for most of the country this is an increase of 40 350 from the 2023 limit of 726 200 the baseline limit for counties with higher home values is 1 149 825 or 150 of 766 550 2the fhfa has a different set of provisions for areas outside of the continental united states for loan limit calculations as a result the baseline limit for a jumbo loan in alaska guam hawaii and the u s virgin islands as of 2024 is also 1 149 825 that amount may be even higher in counties that have higher home values 2if you have your sights set on a home that costs close to half a million dollars or more and you don t have that much sitting in a bank account you ll probably need a jumbo mortgage and if you re trying to land one you ll face much more rigorous credit requirements than homeowners applying for a conventional loan that s because jumbo loans carry more credit risk for the lender since there is no guarantee by fannie mae or freddie mac there s also more risk because more money is involved 