A jumbo, also known as a jumbo mortgage, is a form of home financing for whose amount exceeds the conventional limits set by the Federal Housing Finance Agency (FHFA). Designed to finance luxury properties and homes in highly competitive local real estate markets If you have a higher property value and can manage larger monthly mortgage payments, consider a jumbo, or non-conformingOpens Dialog, loan. A jumbo loan provides financing for loan amounts higher than the maximum conforming limits set by Fannie Mae and Freddie MacOpens Dialog. A conformingOpens Dialog first mortgage plus a home equity line of credit may provide greater payment flexibility. Both are available for purchase and refinance loans (including cash-out refinances). If 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're probably going to 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.