Jumbo mortgages are loans borrowed for amounts substantially higher than conventional conforming loan limits. The current conforming loan limit for a single-family home is $417,000 for all states - except Hawaii and Alaska, where it is $625,500. As jumbo loans exceed the conforming loan limits established by Fannie Mae and Freddie Mac, they are more difficult to sell on the secondary market. This makes them high risk loans and lenders offset their financial risk by charging the borrower a higher interest rate. They can also have stricter underwriting and larger down payment requirements.
Jumbo loans are available for primary residences, second or vacation homes and investment properties. They can have variety of terms, and are available as fixed-rate or adjustable-rate loans.
Jumbo loan for amounts greater than the Conforming Jumbo limit in your county can be up to $1-2 million (or more depending on your property location). Rules vary from lender to lender, but mostly borrowers need good credit and a high down payment to qualify.