Definition - What does Jumbo Loan mean?
A jumbo loan is a type of non-conforming loan. It refers to a mortgage where the amount of the loan turns out to be more than the limit set by the Office of Federal Housing Enterprise Oversight (OFHEO).
Justipedia explains Jumbo Loan
Since the amount of the loan is higher than typical mortgages, it is not guaranteed or purchased by Freddie Mac or Fannie Mae (the reason why it is also referred to as a non-conforming loan), and also carries a higher interest rate than normal loans.