Jumbo Loans: Non-conforming loans designed to meet your financing needs

What are jumbo loans?

Jumbo loans – also referred to as non-conforming loans – are generally home loans that exceed $417,000 in the 48 contiguous states or $625,500 in Alaska and Hawaii. Loans less than $417,000 are called conforming loans. In 2008, as part of the Economic Stimulus Package, the conforming loan limit has been increased to as high as $729,750 in select areas* (available until December 31, 2008).

The conforming loan amounts are periodically set by the Office of Federal Housing Oversight, and followed by the two largest secondary market lenders – Fannie Mae and Freddie Mac. A secondary market is where primary mortgage lenders – the lenders who originally fund your loan – sell mortgages and can then use those funds in originating more loans. Fannie Mae and Freddie Mac buy mortgages in the secondary market and they abide by the set limit on the loan amount.

In recent years, the market for jumbo loans has grown due to the high cost of housing in many parts of the US. In many high cost states such as California, New York and Florida, a large percentage of jumbo loans are originated because the median cost of homes in many metropolitan areas exceeds the normal conforming loan limit of $417,000.

Key features of jumbo (non-conforming) loans

• Typically have higher interest rate than conforming loans
• Different requirements for down payments than smaller, conforming loans
• Loan amounts to help you finance your dream house

Need additional information about jumbo loans?

Call Countrywide’s Full Spectrum Lending Division 1-800-909-8217 for a FREE consultation with one of our knowledgeable loan advisors.

                                   

* The actual new limit for your area is based on a percentage of the area median sales price for the Metropolitan Statistical Area (MSA) in which your property is located. Although the new limit of $729,750 is only available in certain high-cost areas of the country, many MSAs across the nation saw temporary increases to the conforming loan limit over the “current” limit of $417,000. Product guidelines and pricing for home loan applications under temporary "jumbo conforming" loan limit increases differ from lending parameters for home loans under traditional conforming amounts.