VA Jumbo Loan Guidelines

Are you a veteran or military member looking to buy a high-priced home? VA jumbo loans may offer financing above the standard VA loan limits. This guide covers everything you need about VA jumbo loan guidelines, limits, and requirements in 2023.

VA jumbo loans allow qualified veterans and military members to borrow above the conforming loan limits. This opens access to more expensive homes, especially in high-cost metropolitan areas. We’ll outline the loan limits, eligibility criteria, and benefits of VA jumbo financing. Read on to see if you could qualify for a VA jumbo mortgage in 2023!

What is a VA Jumbo Loan?

A VA jumbo loan is a VA-guaranteed mortgage that exceeds your county's standard VA loan limit. Regular VA loans adhere to the loan limits set by the Federal Housing Finance Agency. For 2023, the baseline limit across most U.S. counties is $726,200.

VA jumbo loans let eligible borrowers finance homes above this limit, up to $726,200 in most areas. Veterans can purchase more expensive houses by providing jumbo financing, particularly in competitive markets. These loans retain VA benefits like competitive rates and no monthly mortgage insurance.

VA Jumbo Loan Limits for 2023

In most counties, the maximum VA jumbo loan limit for 2023 is $726,200. However, limits can go up to $1,089,300 in certain high-cost areas like San Francisco, San Diego, and New York City.

Actual VA jumbo loan caps vary by county and depend on the conforming loan limit in your area. Check your county’s limit to see the maximum you can borrow with VA jumbo financing. You can look up limits by state and county using the VA’s loan limit tool.

For example, the 2023 conforming limit in Los Angeles County is $1,089,300. This means eligible borrowers could get a VA jumbo loan up to $726,200.

VA Jumbo Loan Requirements

While VA jumbo loans allow more considerable borrowing power, you must meet the following eligibility requirements:

VA Entitlement: You must have full VA loan entitlement to get a VA jumbo mortgage. This means having sufficient entitlement not tied up in an existing VA loan.
Credit Score: Most lenders require a minimum credit score of around 620–640 for VA jumbo loans. Your score must demonstrate that you can responsibly manage a large mortgage.
Income and Debt: Your income, assets, and total debts will be reviewed to assess if you can afford the larger monthly mortgage payment.
Home Location: The property must be within an eligible area and meet VA appraisal requirements. Not all counties qualify for VA jumbo financing.

Work with a VA-approved lender to confirm you meet the credit, income, and eligibility requirements for a VA jumbo loan for the purchase price and area you are considering.

Pros and Cons of VA Jumbo Loans

VA jumbo loans offer advantages like flexible credit, low rates, and higher loan amounts. However, there are also limitations to consider:

Pros

Higher loan limits for expensive houses
100% financing with no down payment
Low VA jumbo mortgage rates
Lenient credit score requirements
No monthly mortgage insurance

Cons

Stricter eligibility rules vs. conforming loans
Higher upfront VA funding fee
Potentially larger monthly payments
Cannot exceed county loan limits.
Not available in all counties

Analyze the pros and cons based on your specific homebuying goals and financial situation. In high-priced areas, VA jumbo loans can make financing more accessible for eligible veterans.

How Do VA Jumbo Loans Compare to Conventional Jumbo Loans?

VA jumbo loans offer different benefits and requirements compared to conventional jumbo mortgages. Here is an overview of key differences:

Down payment: VA jumbos need no down payment, while conventional jumbos typically require 10–20%.
Mortgage rates: VA jumbos often have lower interest rates than conventional jumbos.
VA funding fee: VA jumbos have an upfront VA funding fee of 1.4–3.6% of the loan amount.
Mortgage insurance: conventional jumbos require mortgage insurance. VA jumbos do not have monthly mortgage insurance.
Credit scores: VA jumbos may have more flexible credit guidelines than conventional loans.
Loan limits: VA jumbo loan limits differ by county, while conventional jumbos have standard loan limits set by the lender.

If you’re eligible for a VA jumbo, compare terms against conventional jumbo loans. Look at overall costs and monthly payments when evaluating the best mortgage option.

Can I Use a VA Jumbo for Refinancing?

In addition to purchases, VA jumbo loans can also be used to refinance an existing mortgage above its conforming limits. You may consider a VA cash-out jumbo refinance to tap equity or a VA streamline jumbo refinance to lower your rate.

To qualify for a VA jumbo refinance, you need sufficient remaining VA loan entitlement and must meet credit and appraisal requirements. Refinancing to a VA jumbo loan enables eligible borrowers to access lower rates, cash out equity, or consolidate debt through higher loan amounts.

Finding the Best VA Jumbo Loan Lender

As with any mortgage, shopping for lenders is crucial to finding the best VA jumbo loan terms. Compare quotes from multiple VA-approved lenders to get the lowest rates and costs. Online lenders tend to offer excellent pricing on jumbo VA loans.

Look for a lender specializing in VA loans with experience with VA jumbo financing. They will guide you through the application process and ensure you meet the requirements to tap into higher borrowing power.

5 Tips for Getting Approved for a VA Jumbo Mortgage

Follow these tips when applying for a VA jumbo loan:

Maintain a credit score of at least 640; the higher, the better.
Document sufficient income and assets to afford the larger payment.
Pay down existing debts and loans to lower your DTI ratio.
Choose a property in a county eligible for VA jumbo financing.
Work with a VA-approved lender experienced in jumbo loans.

Meeting VA Jumbo guidelines ensures your loan application is smooth and successful!

The Bottom Line: Who Benefits from VA Jumbo Loans?

In summary, VA jumbo loans allow qualified veterans and service members to finance expensive homes above standard VA limits. These loans can benefit borrowers in high-cost areas who have:

Full VA entitlement to use
Minimum 620 credit score
Stable income to afford higher payments
DD-214 showing fulfillment of service requirements

Veterans purchasing in competitive markets like California and New York may see significant advantages from VA jumbo loan financing.

Key Takeaways on VA Jumbo Mortgages

VA jumbo loans let eligible borrowers finance up to $999,999 in most counties.
A VA jumbo is a VA-backed purchase or refinance mortgage above conforming limits.
Requirements include VA entitlement, good credit, and qualifying income.
VA jumbo loans retain benefits like no down payment and no PMI.
Compare rates and terms from multiple VA-approved lenders.

For qualified borrowers, VA jumbo loans can make buying a high-value home achievable thanks to flexible financing. Understand the guidelines and limitations for leveraging VA loan entitlements above standard limits.

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