Fannie Mae and Freddie Mac buy conforming loans. Conforming loans have loan limits are set by the Federal Housing Finance Agency (FHFA). Loan amounts over the set limits are known as Jumbo Loans. Jumbo loans are not eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements.
The value of a jumbo loan varies by county. The FHFA sets the conforming loan limits for different areas on an annual basis. The limit for 2022 was set at $647,200 for most of the country. For counties that have higher home values, the baseline limit is set at $970,800. Once the loan limit goes above the loan limit it is considered a Jumbo loan.
Anyone who wants to purchase a home with a loan amount above the FHFA limits.
Typically, the lowest down payment allowed is 10%
Yes, with a loan amount up to 80% of your home’s value.
Jumbo loans have loan terms that are fixed and 5, 7 and 10 year ARM’s.