A VA Jumbo loan was initially used by active-duty military service members and veterans who needed to purchase a home that exceeded VA loan limits for their county. As of January 1, 2020, the 2019 Blue Water Navy Vietnam Veterans Act repealed loan limits on VA loans. There’s no longer a limit to the amount of money a veteran can borrow when they have full entitlement.
A VA jumbo loan will only apply to those that have partial entitlement meaning that you’ve already used a portion of your VA loan benefit. This loan type will be useful if you have partial entitlement, and you’re planning to purchase a home that exceeds the VA loan limit for your county.
Partial entitlement could result from:
- Prior VA foreclosure or short sale
- VA loan on a rental that used to be primary
- VA loan on a current residence that will sell after the new purchase
VA Loan Limits
The Veterans Administration’s loan limits mirror that of conforming loan limits. These loan limits are based on each county. Currently, the base conforming (Fannie Mae and Freddie Mac loans) and the VA loan limit is $510,400. Thus, Veterans are potentially able to purchase or refinance a home up to 100% of the price or appraised value. Whichever is less. Yet, there are some counties that allow a no money down purchase loan above the $510,400! Additionally, there are higher limits for Veterans purchasing a multi-unit dwelling.
- 2 units = $653,500
- 3 units = $789,950
- 4 units = $981,700
VA Jumbo Loan Down Payment
Veterans with partial entitlement will be required to make a down payment on their purchase. Check out these low down payments required by VA! Traditionally, conventional jumbo loans won’t allow less than 5% down. Plus, on the conventional jumbo loans that would allow 5, 10, 15% down, mortgage insurance would probably be required. Typically, it is monthly mortgage insurance. In comparison, VA jumbo loans do not have monthly mortgage insurance which helps keep the monthly payment down. Although, there is a financed, VA funding fee required unless the borrower is a disabled Veteran. The funding fee is waived for military veterans considered 10% or more disabled by the VA.