See the definition for conventional loans here.
Jumbo mortgage refers to any loan over the current Fannie Mae or Freddie Mac conforming loan limit. Fannie and Freddie are GSE's or "government sponsored enterprises" charged with creating mortgage guidelines among other things. In order to qualify under Fannie/Freddie, a loan must be under a certain maximum.
As of the publishing of this answer the conforming loan limit is $417,000. It has been getting higher and higher as the years progress. In 1980, it was under $100,000! Just a year and a half ago it was under $400,000.
Here is a chart from Fannie Mae's website with historical limits.
Answer Submitted on Tue, Nov 20 2007
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