Loans that exceed the conforming loan limit are called jumbo loans or non-conforming loans. The higher loan balances increase the risk for the investors that make them.  Because these loans cannot be sold to Fannie Mae or Freddie Mac, they often have a higher interest rate than conforming loans.

Underwriting can be more strict, and additional documentation may be required to approved and close a jumbo loan (i.e. additional income/asset documentation, second appraisal, etc.).

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