At first glance, a jumbo loan seems self-explanatory: It’s a great, big loan, right? Essentially, that’s true. Obtaining a jumbo loan allows you to borrow a higher loan amount than the maximum value of a conforming loan.
A conforming loan essentially “conforms” to guidelines set by Fannie Mae and Freddie Mac. A nonconforming loan does not—in this case, because it is larger than the limits for conforming loans.