Finance
A Mississippi borrower applies for a 'jumbo' mortgage. Jumbo loans differ from conforming loans in that they:
AHave lower interest rates than conforming loans
BExceed the conforming loan limits set by FHFA and cannot be purchased by Fannie Mae or Freddie Mac, typically requiring stricter underwriting✓ Correct
CAre guaranteed by the federal government
DRequire only a 5% down payment
Explanation
Jumbo loans exceed the FHFA conforming loan limits (which change annually) and cannot be sold to Fannie Mae or Freddie Mac. Because they cannot be easily securitized, jumbo loans carry more lender risk and typically require larger down payments, higher credit scores, and more liquid reserves.
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