What is a jumbo mortgage loan?

A jumbo loan has a higher loan amount than the conforming loan limits set by the Federal Housing Finance Agency (FHFA). The 2020 loan limit on conforming loans is $510,400 in most areas and $765,600 in high-cost areas, such as New York or San Francisco. Because these loans may present a higher risk to lenders, they typically have stricter qualification requirements and higher interest rates than typical, conforming loans.