Jumbo Mortgage: A mortgage loan on a home where the loan value exceeds the standard limits for conventional loans set by Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy loans from banks. As a result, the financial qualifications a borrower must meet to obtain such loans are stricter because lenders don’t have the assurance that Fannie or Freddie will guarantee the purchase of the loans. Brokers and lenders take on greater risk to fund jumbo mortgages.

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