VA Jumbo Loan: Requirements, Limits, and Everything You Need to Know!

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Your earned VA jumbo loan benefit offers you and your fellow qualified veterans that have honorably served or serving our armed forces excellent options, especially-conforming concerning to the non-confirming jumbo loan. Your VA jumbo loan option can benefit you in buying a home or in building a house. Having 2 options is better when there are limited homes on the market, inflation, and increased building material costs.

What is a VA Jumbo Loan?

A VA loan converts to a VA Jumbo Loan when the home loan amount exceeds the county-specific VA loan limit. The VA loan limit for most counties in 2022 is $647,200 but reaches $970,800 in high-cost areas. If you need a VA jumbo quote to build on land you own or to buy a home then you’re on the correct website! VA lending and serving those who served is our specialty! VA home loan limits don’t restrict your purchase price if you want to put money down. The Veterans Administration doesn’t restrict your loan amount but your lender might. We will look at your loan limit to advise you if you would be subject to bringing money to closing. Every county has a different loan limit. Also, have you utilized your VA benefit in the past? Subsequent VA loan use affects your entitlement and might cause you to have to put money down if you need a loan bigger than the VA loan limits of your county. We will look at full entitlement and the remaining entitlement below.

What are the differences between a VA jumbo loan and a traditional jumbo loan?

If you’re a home buyer looking for a larger loan amount then you might need a Jumbo Loan. Jumbo loans and conventional loans are different than VA jumbo loans. A conventional loan becomes a jumbo loan when it exceeds the Federal Housing Finance Agency (FHFA) limits for conventional loans bought by Fannie Mae or Freddie Mac. You might also hear non-VA Jumbo loans called non-conforming because they are made above the conforming loan limit, and they aren’t regulated by government-sponsored entities Fannie Mae or Freddie Mac. Traditional jumbo loans aren’t mainstream like a Jumbo VA loan, conventional loan, or an FHA loan so they aren’t as widely available and can have higher mortgage rates. When the economy tanks there is less interest in traditional jumbo loans because the secondary market and liquidity for these loans decrease. Usually, you’ll need a higher credit score and much more money down on a traditional jumbo loan vs a Jumbo VA loan. VA jumbo loans are just like any other VA loan because they both become Ginnie Mae bonds through securitization in the secondary market and are guaranteed by the VA. And of course, let’s not forget about VA loans usually having a $0 down payment for qualified Veteran and active duty Military buyers. Talk with our Jumbo VA loan specialists if you’re considering a jumbo loan or jumbo VA loan

Qualifying For a VA Jumbo Loan

You can qualify for a VA Jumbo loan with almost the same underwriting as a VA loan. You’ll need to confirm the city you’re buying a home or building a home because your county loan limit will dictate the maximum VA loan amount vs the jumbo VA loan amount and VA funding fee. Like all home loans, we’ll look at your credit score, income, debt-to-income ratio, liquid reserves, job stability, ability to pay, and your VA entitlement. Not to mention, the property is also analyzed with a Veterans Administration-approved Appraiser. The home must meet minimum qualifications.

VA Jumbo Loan Requirements

Regardless of whether you do a VA construction loan, VA loan, or Jumbo VA loan; you’ll still need a certificate of eligibility that we can rapidly obtain for you through the VA.gov portal. Make sure you understand your service requirements and have a copy of your DD214. VA Jumbo loan rates and VA construction Loan rates are normally a little higher than the rate of a VA loan. We have no problem with you checking mortgage rates with other lenders but you can count on us to give you the best deal and best service!

Full VA loan entitlement

Technically you have no home loan limit with full entitlement according to the Veterans Administration. However, don’t forget that the VA doesn’t make VA loans. If you are shopping VA jumbo loan rates then you’re in the right place! We’re not the only VA loan lender, but we’re the best! According to the VA, “Eligible Veterans, service members, and survivors with full entitlement no longer have limits on loans over $144,000. This means you won’t have to pay a down payment, and we guarantee to your lender that if you default on a loan that’s over $144,000, we’ll pay them up to 25% of the loan amount.”  If you’ve never used your earned VA loan benefit then you have full entitlement. Also, you might be a seasoned Veteran home buyer who already paid off a previous VA loan. Do you need our help getting your eligibility restored? Have you dealt with a VA loan foreclosure or short sale in the past but repaid your obligation? If so, we’ll likely be able to get your full entitlement!

Remaining entitlement

Have you looked at your COE before and seen your basic entitlement of 36K? That information tells us, your lender that you have full entitlement. Don’t get confused, that’s not how much you can borrow. It’s a protection for us VA loan lenders in case of default. For a loan under 144K, the VA guarantees us at least 36K based on the losses. If the loan is over 144K then the VA guarantees us that they’ll pay us up to 25% of the amount we loaned you.

VA Jumbo Loans Limits and Down Payments

VA jumbo loan limits, VA loan limits, and conforming loan limits are all the same and based on your city. The base limit for much of the U.S. is $647,200. However, in high-cost counties, the limit can exceed $970,800. In 2022 we saw a significant increase in VA loan limits to keep up with inflation. You can link to the SAM page of VA loan limits.

Understanding VA Jumbo Loans Limits

Don’t apply for a VA jumbo loan before you know your lender’s max VA loan limit. Mortgage loan limits for every U.S. county, as published by Fannie Mae https://singlefamily.fanniemae.com/originating-underwriting/loan-limits & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA).

If you have full entitlement, you won’t have a loan limit

The Blue Water Navy Vietnam Veterans Act of 2019 repealed VA loan limits starting January 1, 2020, and therefore it’s up to your VA-approved lender to tell you their max loan amount. A first-time homebuyer will always have full entitlement. Just because you’ve utilized your VA loan entitlement in the past doesn’t mean you don’t have full VA loan entitlement now. As mentioned previously, once you’ve paid off your past VA loan your VA loan entitlement is restored. Always consult your VA loan officer to verify anything you’ve read.

If you have remaining entitlement, you will have a loan limit

When you have remaining entitlement you have a VA loan limit and will likely be required to put money down. As set forth by the Veterans Administration, “Veterans with partial entitlement, the maximum amount of guaranty for a loan above $144,000 may not exceed the lesser of 25 percent of the loan amount or 25 percent of the county loan limit minus the amount of entitlement previously used and not restored” Learn how to calculate your remaining entitlement here at https://www.benefits.va.gov/HOMELOANS/documents/docs/guaranty_calculation_examples.pdf

Understanding how the VA entitlement may help with down payments

If you have full entitlement then it’s likely you won’t have a downpayment. However, in some cases, the house might not appraise for the sales price and that could leave you with the option to bring money to closing to cover the difference. All of your hard work and each day of service you gave to the US Military counted towards your earned VA entitlement. Let’s show you How to Calculate Bonus VA Entitlement and how it relates to a possible down payment. You use at least a portion of your entitlement when you buy a home with a VA loan. The amount is typically a quarter of the loan amount, which reflects the VA’s 25% guarantee. Let’s say you purchased a home three years ago for $300,000 and used $75,000 of your VA entitlement, and you’re looking to use your VA loan benefit to purchase a second home. The maximum entitlement for most counties in the country is currently $161,800, which is a quarter of the standard VA loan limit ($647,200). Here’s how VA lenders determine your remaining entitlement and potential down payment needs:
  • (County loan limit) – (in-use VA entitlement) = remaining entitlement
  • $161,800 – $75,000 = $86,800 in remaining entitlement
  • (Remaining entitlement) x 4 (VA guaranty) = max purchase price with $0 down
  • $86,800 x 4 = $347,200 max purchase price with $0 down

How Can You Get a VA Jumbo Loan?

If we have educated you enough on a VA jumbo loan and you believe that it’s the right choice for you then we recommend you apply now. The first step is to make sure that you can qualify for the loan amount that you need. We will analyze your loan application, credit history, and debt-to-income ratio to make sure that you can qualify. If it looks like you’re going to qualify we’ll issue you a pre-approval letter. A pre-approval letter is very important because your Military friendly realtor will need it when submitting offers on homes for you. Without a pre-approval letter, the seller and listing agent won’t think your serious, and in a competitive seller’s market, that’s essential. Don’t forget that you won’t get a VA jumbo loan approval if the property doesn’t qualify. You might ask yourself, why wouldn’t the property qualify? If the home doesn’t appraise for the sales price or more then you might be required to bring money to make up the difference if you want to close. Or, you’ll have the option to get out of the contract risk-free since the home wasn’t approved. That’s a great protection feature for Veterans that could help you get your earnest money back and not lose money in the case where a home doesn’t appraise for the needed value.