VA Jumbo Loans

Technically known as a High Balance VA Loan, the VA Jumbo Loan is often confused with a higher limit Veteran mortgage that is available in high cost areas and is based on the median home price for the county the home is located in.  The Jumbo VA Mortgage doesn’t have a limit per se, however, the borrower will need to make a small down payment which is primarily based on the the purchase price of the home, and how much it is over the local VA loan limit.

In most cases the Veteran borrower would need to put down 25% of the incremental amount above the limit for the county.  So for example, if the purchase price was $557,100 in an area where the limit was $424,100, the difference is $108,000 and 25% of that is $27,000.  So the borrower would need to put down $27,000 on $525,000, about 5% which is much less than what is required with most conventional loan programs.  This is a straight forward example for a normal cost area where the borrower has full entitlement.

In a scenario where the home is being purchased in a high cost area the VA Jumbo program can be even more enticing.  For instance, if the high cost county limit is $636,150 and the purchase price is $711,150 then the borrower would need $18,750 (25% of the 75K difference) and $692,400 would be financed at the exceptional VA rates.  That’s only a 2.6% down payment required on a $711,150 home!!  There aren’t many (if any) conforming or jumbo loan programs that will allow such a small down payment on a purchase of that size.

If the Veteran borrower has partial entitlement from a previous VA loan, the total amount available will be affected.  It is recommended to fill out the short form to the right and allow a VA Specialist assist you in calculating the maximum amount available to you.

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