jumbo loan

Definition

A mortgage exceeding conforming loan limits set by Fannie Mae and Freddie Mac, typically requiring better credit and larger down payments. It's called 'jumbo' because both the loan and the payments are supersized.

Example Usage

We needed a jumbo loan for our starter home because apparently $766,550 doesn't buy much in San Francisco.

Origin

Banking terminology from the 1980s when conforming limits were established

Fun Fact

Jumbo loan limits vary by county—in some expensive areas, you need a jumbo loan for a modest three-bedroom that would be a mansion elsewhere.

Source: Mortgage lending terminology

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