VA has permitted Jumbo size home loans for quite a while now. However, many Veterans are still unaware of the program requirements and benefits. This program is available to approved Vets nationwide, not just exclusive high costs locations in Florida or California. If you are a Veterans with sufficient entitlement, it’s worth your time to look at this option before standard Jumbo mortgages.
First, it’s important to define what a “Jumbo” loan is? Jumbo loans are those that exceed the basic conforming loan limits set by Fannie Mae and Freddie Mac. As of current, most of the U.S. has a conforming loan limit of $484,350 with the exception of more expensive areas in CA, Fla, Virginia, Colorado, and the North East. Some of these locations have a conforming loan limit of $726,525. Keep in mind that VA follows the conventional loan limits.
Approved Vets can secure 100% financing up to their standard conforming loan limit with approved credit, etc. Any VA loan amount over this set conforming loan limit will require a down payment. The down payment amount is determined based on 25% of the amount that exceeds the basic loan limits. Let us explain in the examples below.
- George wants to purchase a $525,000 home in Charlotte, NC. The basic VA loan limit in this area is $484,350. So the difference is $40,650. George’s down payment will need to be 25% of $40,650 = $10,162
- Tim wants to purchase a $900,000 home in Los Angeles CA. The basic VA loan limit for this county is $726,525. So the difference is $173,475. Tim’s down payment will need to be 25% of $173,475 = $43,369
VA Jumbo Advantages:
- VA loans do not require monthly mortgage insurance costs – PMI.
- VA Jumbo loans are normally easier to qualify for when compared to regular Jumbo programs. Many of the standard lender and bank Jumbo’s require much higher credit and down payment.
- VA permits Vet’s to pay only certain “allowable” closing costs.
- VA benefits can be used more than once as long as the Vets does not currently have an active VA mortgage open.
- The program can be used for both VA purchase and refinance assuming the Vet has proper eligibility and entitlement.
- Qualifying is easy and often done same day.
VA Jumbo Approval Checklist:
- VA Jumbo is limited to $1,500,000 loan amounts regardless of location.
- The program is limited to only primary homes – investors are not permitted.
- Borrowers should be able to fully document income and assets like any other government home loan.
- Regular VA loans allow lower credit score in the 500’s. However, the Jumbo variation will require a credit score of 640 or greater by most mortgage companies.
- Veterans should have some savings for a few months payment reserves after down payment and closing costs are paid.
- Vet’s that are using their VA home benefits for a 2nd or 3rd time will be required to pay an increased VA funding fee. The VA funding fee can be rolled into the borrower’s loan amount. This one-time fee can vary based on several variables.
Those that have questions about requirements or applying can call Ph: 800-691-8826 or visit https://VaMortgageHub.com
Please also be sure to learn about regular 90% and 95% Jumbo Loan financing here.