For veterans and active military personnel aiming for homes in high-cost housing markets, financial hurdles can often stand in the way. While traditional VA loans provide significant benefits, they may fall short when home prices exceed standard limits. Enter the VA jumbo loan—a specialized mortgage product that combines the perks of VA lending with the capacity to finance upscale properties.
What Are VA Jumbo Loans?
VA jumbo loans are designed for homes that exceed the Federal Housing Finance Agency’s (FHFA) loan limits, which are set at $766,550 for 2024 in most areas. These loans allow eligible veterans to access higher loan amounts while retaining key VA loan benefits such as reduced down payments and no private mortgage insurance (PMI).
Key Benefits of VA Jumbo Loans
-
Lower Down Payments:
- Traditional jumbo loans often require 10-20% down.
- VA jumbo loans offer significantly reduced down payments, typically requiring only 25% of the amount exceeding local loan limits.
-
No PMI Requirement:
- Unlike conventional jumbo loans, VA jumbo loans maintain the VA program's hallmark benefit of eliminating PMI, reducing monthly expenses.
-
Competitive Interest Rates:
- Backed by the VA, these loans often come with lower interest rates compared to traditional jumbo loans, making them more affordable in the long term.
Eligibility for VA Jumbo Loans
To qualify, borrowers must meet both VA eligibility criteria and additional financial requirements due to the larger loan amounts.
Requirements Include:
- Sufficient military service eligibility
- Adequate credit score (usually 620 or higher)
- Proof of income to support the higher loan amount
For homes priced above local loan limits, borrowers may need to provide a down payment, calculated as 25% of the price exceeding the limit.
How VA Jumbo Loans Work: An Example
Imagine you're purchasing a $1,000,000 home in a region where the VA loan limit is $766,550. The difference is $233,450. With a VA jumbo loan, your required down payment would be just 25% of that amount—$58,362.50—far lower than the $100,000+ down payment typical with conventional jumbo loans.
Why Choose a VA Jumbo Loan?
VA jumbo loans empower veterans to pursue homeownership in high-cost markets while still benefiting from the core advantages of VA lending. They bridge the gap between standard VA loan limits and the realities of pricier real estate, making upscale homes more accessible.
Get a VA Jumbo Loan
If you're a veteran or active service member eyeing a high-cost home, a VA jumbo loan could be the key to unlocking your dream property. Give us a call today!