Posted on: January 6, 2017
The standard VA loan limit is $424,100 in most areas of the country. But VA allows higher loan amounts of up to $721,050 in higher-cost counties.
But VA loans can be even higher. There is no true limit for VA loans. Veterans can get VA loans upwards of $1 million or more.
VA loans that are above standard county limits are known as VA jumbo loans.
Veterans who believe they need a jumbo loan because they are over the standard $424,100 loan limit should check their county loan limit. They may have access to higher-than-standard loan amounts without needing a VA jumbo loan.
For example, a Veteran home buyer in Los Angeles, California can be approved for a VA loan up to $636,150 and still be within standard VA loan limits. A buyer in Chesapeake County, Virginia has access to loans up to $458,850.
Yet, both of these buyers could buy homes upwards of $1 million or more. Read on.
Veterans don’t need a “true” VA jumbo loan unless their expected loan amount is above the limit for the county.
When the Veteran exceeds the county limit, he or she must apply for a VA jumbo loan which requires a small down payment.
Here’s an example. A Veteran purchases a home for $500,000 in a county with a $450,000 VA loan limit.
He would be required to make a 25% down payment on the difference. In this case, a $12,500 down payment would be required.
This same formula works for any loan amount. If a veteran exceeds the VA loan limit by $100,000, he or she would make a 25% down payment on that amount.
The required down payment is typically much lower than down payments for conventional jumbo loans. Veterans have access to some of the best jumbo loan rates and terms available in the mortgage market.
VA jumbo rates are competitive with those of standard jumbo loans and require much lower down payments. The VA’s backing of these loans make them a safe loan product for banks. Lower risk means the Veteran pays a lower rate.
Here are some links to additional information.