Jumbo Loans
If your loan amount exceeds the VA county loan limit in your county it’s considered a VA Jumbo Loan. The VA county loan limit for 2024 in most but not all counties is $766,550.
How are VA Jumbo Loans Different?
The process and eligibility are generally the same for VA Jumbo loans but the pricing may vary when the loan is a jumbo loan or exceeds the VA county loan limit.
Guidelines and lender requirements may vary from non-jumbo VA loans related credit, reserve requirements, income requirements and debt-ratio requirements.
Credit score requirements for VA loans also vary by lender, but a minimum of 620-660 is typical.
What are VA Jumbo Loan Rates?
VA jumbo rates are generally higher than loans under the conforming loan limit. Even with the VA guarantee, jumbo loans carry additional risk to the lender, which is the cause for typically higher rates.
VA Jumbo loan rates are typically lower than conventional and FHA rates.
Still Zero Money Down?
In most cases you obtain a VA Jumbo loan with zero money down although there may be some exceptions.
If you have full VA loan entitlement, you still won’t need a down payment. However, if you have diminished entitlement from not paying off a prior VA loan or past foreclosure, you may need to bring a down payment to closing.
In these cases, the down payment required is typically 25% of the difference between the loan amount and your available entitlement. You can get a complete overview of VA entitlement here with example calculations.
What is the Max VA Jumbo Loan amount?
We currently have options for purchase loans up to $3 million pending income and credit qualification.
When partial entitlement is available for any reason loan limits will be subject to current FHFA county limits.
The Federal Housing Finance Administration sets conforming loan limits. These limits exist by law to regulate what mortgages Fannie Mae and Freddie Mac can purchase in the secondary mortgage market.
That’s a lot to take in if you’re not an industry professional. The short version is Fannie Mae and Freddie Mac purchase mortgages in bulk from lenders in the secondary mortgage market. The benefit to consumers is purchasing the loans allows financial institutions to keep providing mortgages to consumers without running out of money.
Summary
You may see slightly different guidelines when applying for a VA jumbo loan, but you’ll likely be getting much better rates and terms than a traditional jumbo and the guidelines are likely to be much more flexible as well.
The VA guarantees a portion of the loan in the even that the borrower defaults which is what enables the terms to be more favorable on these loans. Accordingly, Lenders are typically more willing to issue better terms with more flexibility than traditional jumbo loans – including $0 down and more flexible income and debt ratios.
