Jumbo mortgages are loans borrowed for amounts higher than conventional conforming loan limit. The 2022 conforming loan limit for a single-family home is $647,200 for all states – except Alaska, Hawaii, Guam, and U.S. Virgin Islands, where it is $970,800. As jumbo loans exceed the conforming loan limit 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. The following areas are considered high cost locations and have a conforming loan limit of $970,800 making any mortgage above this amount a jumbo loan: Arlington, Clarke, Culpeper, Falls Church, Fairfax, Fauquier, Fredericksburg, Loudon, Madison, Prince William, Rappahannock, Spotsylvania, and Warren.
Jumbo loans are available for primary residences, second or vacation homes, and investment properties. They can have a variety of terms and are available as a fixed rate or adjustable rate loan.