A Jumbo Loan is a specific type of non-conforming loan. It is unlike a normal “Conventional Loan
” due to the fact that it exceeds the maximum conforming limit of $510,400. This maximum loan amount limit has been established by Fannie Mae and Freddie Mac and is subject to change over time with home price fluctuations.
These two government-sponsored enterprises have specific requirements in place that determine if they can purchase a loan from a banker or lender. There are many different guideline requirements that make a loan a “conforming loan,” and the loan limit of $510,400 is merely one of the guideline requirements.