A super jumbo mortgage usually consists of financing greater than $1,000,000 for a purchase or refinance transaction, reports Mortgage 101. However, since government agencies do not back super jumbo mortgages, the loan limits vary by region and lender.
Jumbo mortgages, known as nonconforming loans, are any loan amount greater than $417,000 as of 2015. The government-sponsored agencies Fannie Mae and Freddie Mac set the loan limits. Fannie Mae and Freddie Mac buy mortgages from banks and lenders and securitize the loans for investment purposes. Therefore, the two agencies set the guidelines for which banks and lenders approve financing. Conforming loans are any type of financing for purchase or refinance transactions less than $417,000 for single-family properties, according to Fannie Mae. In Alaska, Guam, the U.S. Virgin Islands and Hawaii, the loan limits are $625,000 for single-family properties.
Lenders offering super jumbo mortgages require that borrowers meet strict guidelines before they approve them for financing. Borrowers must have excellent credit and usually need 20 percent of the appraised value as a down payment. In some cases, lenders require up to 50 percent of the appraised value as a down payment to ensure borrowers have a significant amount of their own money vested in the properties, explains Mortgage 101.