A jumbo loan is a type of mortgage that exceeds the limits set by the Federal Housing Finance Agency (FHFA) for conforming loans. These loans are not eligible for purchase by government-sponsored entities like Fannie Mae and Freddie Mac, which means they typically come with stricter credit requirements and higher interest rates. Because jumbo loans are used to finance more expensive properties, they are popular in high-cost real estate markets. Borrowers often need a larger down payment and a strong credit score to qualify, making them suitable for individuals with significant financial resources.