VA jumbo loans are simply VA backed mortgages above the standard county loan limits. As of January 2018, the standard VA loan limit is $453,100 for most cities across the country. Select “high cost” locations in California, Florida, Virginia, the loan amounts go up to $679,650. Eligible VA loan buyers can purchase a home with NO money down up to that limit in any county in the U.S. Additionally, eligible veterans now have Jumbo purchase options up to $1,500,00 loan amounts. Most of the jumbo options are not 100% financing and require a small down payment from the Vet. However, they provide a great solution especially good for Vets in more expensive locations like San Diego, Honolulu, Miami, Chicago, Phoenix, Los Angeles and Dallas.
For veterans who exceed the county loan limit, he or she will be required to put 25% down payment for ONLY the amount over the county limit. If a veteran exceeds the VA loan limit by $150,000, there would need to be a down payment of 25% of that amount, or $37,500. This required down payment is typically much lower when compared to the down payments required by traditional jumbo loans.
In addition, most standard jumbo loans require higher credit scores when compared to VA jumbo loans. VA borrowers will face slightly tighter credit and underwriting standards for VA jumbo loans compared to standard conforming VA loan. Most lenders and banks will require credit scores above 620 and a lower debt-to-income ratio. Applicants should also have a few months of mortgage payment cash reserves.
Example #1: VA eligible buyer in Phoenix, Arizona looking to purchase a home for $600,000.
- $600,000 (Purchase Price) minus the $453,100 (maximum 100% limit) = $146,900
- 25% of $146,900 difference is $36,725 or just about 6% of the purchase price
- The applicable VA funding fee over the $453,100 limit would need to either be paid by the veteran borrower or seller.
Example #2: VA eligible buyer in San Francisco, California (high-cost location) looking to purchase at home up to the limit of $1,500,000
- $1,500,000 (Purchase Price) minus the $679,650 (maximum 100% limit) = $820,350
- 25% of $820,350 difference is $205,087 or just under 14% of the purchase price
- The applicable VA funding fee over the $679,650 limit would need to either be paid by the veteran borrower or seller.
Keep in mind there is never any monthly mortgage insurance (PMI) on VA loans. Additionally, VA jumbo interest rates are often more attractive when compared to regular jumbo loans.
Have questions? we are happy to answer any questions about pre approval, VA entitlement, Certificate of Eligibility, etc. We are available 7 days week for buyers that have questions, just submit the Info Request Form on this page.
VA home buyers can learn more by browsing the web site or viewing the helpful video below.