Jumbo Loan

A jumbo loan is a loan with a loan amount larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

Currently the limit is set at $417,000 for most areas. Special areas such as Alaska, Hawaii, Guam, and the U.S. Virgin Islands have a higher limit of $625,000.

Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate; usually .25% to .50% higher than that of a conforming loan.