A jumbo mortgage is a non-conforming mortgage. This is a loan a lender makes that doesn’t “conform” to the guidelines of Fannie Mae and Freddie Mac.

Created by Congress in 1938 and 1970 respectively, Fannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, which gives lenders liquidity to make more mortgages.Fannie Mae and Freddie Mac only buy mortgages meeting their guidelines for down payment, credit score, post-closing reserves, and loan amount. Loans greater than these limits set by FNMA and Freddie Mac are usually called jumbo mortgages, but can also be called non-conforming mortgages.

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You’d use a jumbo mortgage when you’re seeking a loan amount that’s greater than the conforming loan limit in your area.Jumbo mortgages have the same overall qualifying methodology as a conforming loan. Lenders will look at credit score, down payment size, total monthly debt obligations relative to income (called your DTI), and money left over after closing.Credit score requirements are about the same for conforming and jumbo: a credit score down to 680 generally gets you most available loan options, albeit with a higher rate than you’d get with a top-tier credit score of 780 or greater.