Jumbo loans present a higher risk for the lender. In the event that the jumbo loan does default, the lender will be at a high risk of loss because it is more difficult to find buyers for high-end expensive homes.
Currently, the Fannie Mae-Freddie Mac conforming loan limit and FHA loan limit limit is $424,100 for all parishes in Louisiana. This means that any loan amounts greater than $424,100 are considered “jumbo” loans.
Because of the higher amount of risk, Jumbo loans typically have higher interest rates, down payments, and monthly payments than the typical conforming home loan.