VA Jumbo Loans offer a pathway for veterans and service members to own homes that exceed conventional loan limits, blending the benefits of VA loans with the capacity for larger financing.
With a VA jumbo loan, veterans and service members can potentially buy a home in high cost-of-living areas, while utilizing their VA loan benefits with no money down.
This definitive guide will provide an in-depth look at what VA Jumbo Loans are, their limits, requirements, benefits, and more.
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Table of Contents
What are VA Jumbo Loans?
A VA Jumbo Loan is a type of government-backed mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA).
These loans are available to eligible veterans, active-duty members of the military, and members of the National Guard and Reserves.
A jumbo loan allows borrowers in high-cost areas to finance larger property purchases that would not be possible under standard VA loan limits​​.
VA Jumbo Loan Limits
Generally, VA loans aren’t bound by loan limits.
If the borrower defaults on the VA loan, the VA guarantees a specific percentage of the mortgage to lenders, regardless of the loan amount.
However, there are instances where a lender will have specific loan limits.
The 2024 conventional loan limits are projected to increase by 3.28%, climbing $23,800 from $726,200 to $750,000 for one-unit properties.
VA Jumbo Loan Limits 2024
| Unit Type | 2023 Limit | 2024 Limit | $ Change |
|---|---|---|---|
| 1-unit | $726,200 | $750,000 | +$23,800 |
| 2-unit | $929,850 | $960,300 | +$30,740 |
| 3-unit | $1,123,900 | $1,160,750 | +$36,850 |
| 4-unit | $1,396,800 | $1,442,600 | +$45,800 |
Eligibility and Entitlement
VA Jumbo Loans are available to those with a history of military service, but the key is understanding your entitlement.
Full entitlement means no limits on the loan amount, while partial entitlement may necessitate a down payment and limits the guaranteed loan amount.
Full entitlement is typically available to those who have never used a VA loan or have fully repaid and closed their previous VA loans​​.
Credit and Income Requirements
While the VA itself doesn’t mandate a minimum credit score, lenders usually do.
For VA Jumbo Loans, a credit score of at least 620 – 640 is commonly required, but this can vary by lender.
Lenders will also assess your debt-to-income ratio to ensure you can comfortably manage the loan repayments​​.
Down Payment Requirements
Full entitlement borrowers can enjoy the significant benefit of zero down payment on VA Jumbo Loans.
However, those with partial entitlement might need a down payment, especially when borrowing amounts significantly higher than the conforming loan limit​​.
Rates and Fees
VA Jumbo Mortgage rates are generally in line with standard VA loan rates and can be more favorable than traditional jumbo loans.
However, rates can vary based on market conditions and your credit profile.
In addition, borrowers may need to pay a funding fee, which ranges from 1.4% to 3.6% of the loan amount, though this fee can often be financed into the loan​​​​.
Remember if you’re a disabled veteran with a VA rating of 10% or higher, you don’t have to pay the VA funding fee!
VA Jumbo Mortgage Benefits Versus Conventional Jumbo Loans
VA Jumbo Loans offer several advantages over their conventional counterparts:
- No down payment: The $0 down payment feature is one of the most notable advantages of a VA loan, setting it apart from most other mortgage types.
- No Private Mortgage Insurance (PMI): This can lead to significant monthly savings compared to conventional loans that require PMI​​.
- Flexible Credit Requirements: While requirements are stricter than standard VA loans, they are often more lenient than for conventional jumbos​​.
- Assistance in Financial Hardships: The VA can assist borrowers facing temporary financial difficulties, a support not typically available with conventional loans​​.
Application Process
- Determine Eligibility: Secure your Certificate of Eligibility (COE) and understand your entitlement status.
- Find a Lender: Shop around for lenders who offer VA Jumbo Loans, comparing rates and terms.
- Get Pre-Approved: This step gives you a clear idea of your borrowing limits.
- Submit Required Documentation: This will include financial statements, employment verification, and more.
- Property Appraisal: A VA-approved appraiser will assess the property value.
- Closing: Once approved, the last step is closing, where you sign the paperwork and finalize the loan.
Conclusion & Wrap-Up
VA Jumbo Loans open doors to homes that might otherwise be out of reach for many veterans and service members, offering more relaxed credit requirements, the potential for no down payments, and other significant benefits.
Understanding these loans’ intricacies is crucial for leveraging their full potential, making your journey to homeownership smoother and more affordable.
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About the Author
Brian Reese is a senior advisor and co-owner at District Lending. He is one of the world’s leading experts in veteran benefits, having helped millions of veterans secure their financial future since 2013. Brian is the founder VA Claims Insider, an education-based Coaching & Consulting company whose mission is to educate and empower veterans to get the VA disability benefits they’ve earned for their honorable service. A former active-duty air force officer, Brian deployed to Afghanistan in support of Operation Enduring Freedom. He is a distinguished graduate of management of the United States Air Force Academy and earned his MBA as a National Honor Scholar from the Spears School of Business at Oklahoma State University.
In Brian’s Words:
“As a military veteran, I’ve made it my life’s mission to help people live happier and wealthier lives. District Lending brings this mission to life. We believe in integrity, honesty, and transparency, which is why you’ll see our rates right on our website. You’ll find lower rates and zero lending fees, which means you can buy your dream home for less. The savings are passed on to you — the way it should be.”
– Brian Reese, Advisor and Co-Owner, District Lending
