What Are Jumbo Loans in California?
Jumbo loan limits in California range from $417,000 to over $600,000.
Fannie Mae and Freddie Mac are the nicknames bestowed upon two government-sponsored entities — the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. These corporations have an active role in providing financial security to mortgage lenders and banks by purchasing certain mortgage loans from them. The limits for loans that Fannie or Freddie will handle has played a role in creating the concept of “jumbo loans.”
Conforming Loans vs. Jumbo Loans
Fannie Mae and Freddie Mac only purchase loans that they deem as “conforming.” There are various qualifications that a mortgage loan has to meet to conform to the rules, but one of the most important is the actual loan amount. At the time of publication, the conforming loan limits were set at $417,000 for a single-family residence, and as much as $801,950 for a four-unit property. Loans in amounts greater than these are called “jumbo loans,” and loans greater than $1 million, on average, are considered “super jumbo loans.”