Jumbo loans exceed the conforming loan limits set by the Federal Housing Finance Agency (currently $766,550 in most areas, higher in designated high-cost markets). These loans require stronger credit profiles, larger down payments (typically 20-30%), and significant reserves. For real estate investors targeting luxury rentals or properties in high-cost markets like coastal cities, jumbo financing is essential. Because these loans are not eligible for government-sponsored enterprise purchase, lenders set their own underwriting standards, which can vary significantly from institution to institution.