Finance
What is a 'jumbo loan' and why is it significant for Hawaii home buyers?
AA. A loan for commercial properties with large floor areas
BB. A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac; common in Hawaii due to high property values✓ Correct
CC. A loan requiring a 50% down payment
DD. A 40-year mortgage designed to reduce monthly payments in high-cost markets
Explanation
Jumbo loans exceed conforming loan limits (currently around $806,500 for most Hawaii counties, with higher limits in some areas). Because they can't be sold to Fannie Mae or Freddie Mac, jumbo loans typically have stricter requirements (higher credit scores, larger down payments, lower DTI) and slightly higher rates.
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