06 May What is the VA Jumbo Loan Limit?
If you are on a search to purchase the most high-end properties in A-listed areas, a regular mortgage won’t suffice. You would need to borrow more loan amount than usual while claiming the same benefits that you would have received from a traditional mortgage.
And, when it comes to being a Veteran or a service member, you have your options all sorted. A jumbo VA loan is just like your traditional VA mortgage. You get perks like no downpayment requirements, lower interest rates and flexible guidelines.
However, unlike a VA loan, a jumbo VA mortgage allows you to borrow a considerable loan amount so that you can purchase your dream home in high-cost metro areas.
Here’s a bit on what exactly jumbo loans are, how to get one and how much maximum amount you can borrow.
What is a Jumbo Loan?
If you have your eyes set on a house that is worth way beyond half a million dollars and you don’t have that much savings sitting in your account, you’re gonna need a jumbo loan.
Mortgage loans that exceed the limits established by the Federal Housing Finance Agency (FHFA) are defined as jumbo loans.
According to the 2022 rules, the VA jumbo loan limit for most counties is $647,200, while it can reach up to $970,800 in other high-cost states. However, regardless of the limit, you can borrow any amount you may qualify for. The limit simply represents the maximum amount you can borrow without making a downpayment. If you wish to borrow more than that, you can make up the difference by making a downpayment.
What is the VA Jumbo Loan Limit?
The average VA jumbo loan limit for the year 2022 is $970,800 for high-cost counties and $647,200 for low-cost counties.
But, here’s the catch.
If you have full entitlement, i.e., if you had never used your loan benefit before or borrowed the loan, sold the property and repaid the VA in full, you would not be subjected to any loan limits. This means that applicants with full entitlement can borrow any amount they may qualify for.
However, if you have partial entitlement, you would be subjected to the limits stated above. If you wish to borrow more than that, you would have to make a downpayment to make up the difference.
Why are Jumbo Loan Limits Necessary?
VA jumbo loan limits help lenders to mitigate the risk involved in borrowing the loan. This allows the borrowers to easily qualify for the loan and make loans widely available.
Jumbo Loan Limit by State
| State | VA Jumbo Loan Limit |
| Alabama | $647,200 |
| Alaska | $647,200-$970,800 |
| Arizona | $647,200 |
| Arkansas | $647,200 |
| California | $647,200-$970,800 |
| Colorado | $647,200-$822,375 |
| Connecticut | $647,200-$695,750 |
| Delaware | $647,200 |
| Florida | $647,200-$710,700 |
| Georgia | $647,200 |
| Hawaii | $970,800 |
| Idaho | $647,200-$648,600 |
| Illinois | $647,200 |
| Indiana | $647,200 |
| Iowa | $647,200 |
| Kansas | $647,200 |
| Kentucky | $647,200 |
| Louisianan | $647,200 |
| Maine | $647,200 |
| Maryland | $970,800 |
| Massachusetts | $647,200-$970,800 |
| Michigan | $647,200 |
| Minnesota | $647,200 |
| Mississippi | $647,200 |
| Missouri | $647,200 |
| Montana | $647,200 |
| Nebraska | $647,200 |
| Nevada | $647,200 |
| New Hampshire | $647,200-$770,500 |
| New Jersey | $647,200-$970,800 |
| New Mexico | $647,200 |
| New York | $647,200-$970,800 |
| North Carolina | $647,200 |
| North Dakota | $647,200 |
| Ohio | $647,200 |
| Oklahoma | $647,200 |
| Oregon | $647,200 |
| Oklahoma | $647,200 |
| Pennsylvania | $647,200-$970,800 |
| Rhode Island | $647,200 |
| South Carolina | $647,200 |
| South Dakota | $647,200 |
| Tennessee | $647,200-$694,600 |
| Texas | $647,200 |
| Utah | $647,200-$970,800 |
| Vermont | $647,200 |
| Virginia | $647,200-$970,800 |
| Washington | $647,200-$891,250 |
| West Virginia | $647,200-$970,800 |
| Wisconsin | $647,200 |
| Wyoming | $647,200-$970,800 |
| District of Columbia | $647,200-$970,800 |
How Your VA Entitlement Affects a Jumbo Loan?
Before we get into this, here’s an overview of VA loan entitlement.
Factually speaking, the US Department of Veterans Affairs guarantees a part of the loan you borrow under this program. Meaning if you default to pay back the loan in any way, the department will pay back a specific amount to the lender. This allows the lender to freely provide VA loans, even if you have a low credit score or not-so-good credit history.
The specific amount is either 25% of the loan amount or $36,000. Simply put, the VA will pay $36,000 to the lender if you fail to pay back the loan.
Your VA Certificate of Eligibility (COE) would state your VA entitlement. If your entitlement is $36,000, you have full entitlement.
How does all this affect your loan application?
If you have full entitlement, you will not be subjected to any limits. This means that you can borrow any loan amount even if you don’t want to make a downpayment.
How would I know if I have full entitlement?
Your VA COE would state your VA loan entitlement. If it is stated, “This Veteran’s entitlement is $36,000”, you have full entitlement.
You might also have full entitlement if any one of the following conditions is true-
- You have never borrowed a VA home loan
- You have paid the previous VA loan in full and sold the property.
- You had a foreclosure but repaid the department in full.
VA Jumbo Loan Requirements
Here’s a list of requirements you would need to satisfy to qualify for the VA jumbo loan.
Credit Score
While it is not mandatory to have an outstanding credit score, it is necessary to have a minimum of 620 or 640 credit score to stand eligible for VA loans. However, it is recommended to have a score of 700 to qualify for the best rates.
DTI Ratio
The lower is your DTI ratio, the easier it would be to qualify for the loan. You are required to have a minimum ratio of at least 43 percent to qualify for the loan.
Down Payment
The minimum downpayment requirements differ from lender to lender. While some ask for at least a 20% downpayment, others might allow you to qualify for the loan without making a downpayment.
In addition to the requirements stated above, you must also pass the eligibility criteria required for obtaining the VA COE and pass the VA loan appraisal.
Jumbo Loan Rates
According to the national survey conducted on mortgage lenders by Bankrate, a fixed-rate 30-year mortgage would come with an interest rate of 3.970%.
The rates you qualify for would also depend upon a number of factors like your credit score, credit history, debt-to-income ratio and market conditions like inflation and demographics.
Jumbo Loan Down Payments
Though you can qualify for the no-downpayment clause under VA home loans, it is wise to make a minimum downpayment so that your monthly installments can go down a little bit.
VA Jumbo Loans vs Traditional VA Loans
The major difference between VA jumbo loans and traditional VA loans is that jumbo loans are non-conforming loans. This means that they are set way beyond the loan limits defined by the FHFA.
You can borrow high-end properties through a VA jumbo loan.
Regardless, they are more or less the same when it comes to claiming the VA benefits. You can qualify for lower interest rates, flexible guidelines and no downpayment requirements.
How to Shop for a VA Jumbo Loan?
You can browse the net or get in touch with military banks or credit unions that provide jumbo VA loans. You might be able to get exclusive military discounts like even lower interest rates if you go to lenders like USAA or PenFed Credit Union.
Is a VA Jumbo Loan Right For You?
If you are a Veteran or a member of the uniformed services and have an eye for the high-end properties situated in high0end counties, then yes, there’s nothing better than a VA jumbo loan. However, it is recommended to shop for lenders so that you qualify for the lowest rate possible.
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