Temporary measures that allow FHA, Fannie Mae, and Freddie Mac (the "GSE's) to make mortgage in the jumbo loan category were recently approved as part of the economic stimulus package signed into law earlier this year.
The Wall Street Journal has an interesting story reporting that the rates for these jumbo loans are higher than standard FHA, and GSE mortgage rates, by about 1/2 of 1%. [Currently 6.375% vs 5.875%].
One reason for the higher rates is that these loans are combined into separate securities with a smaller market. Another is that the rate of refinancing of jumbo loans is historically higher than non jumbo loans; this increases the return that investors want.
(I couldn't provide link to this story itself in WSJ as it is currently available only to subscribers)
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