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4 min read Jan 17, 2024

VA Jumbo Loan: Meaning, Benefits, and Requirements

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Megha Mulchandani

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13% of homeowners have bought homes through VA loans. The demand for a VA jumbo loan is on the rise. This is largely because it allows eligible individuals to obtain more money with VA benefits.

💲 VA Jumbo Loan

  • The Department of Veterans Affairs provides financial assistance if you’re unable to pay back the loan.
  • As of January 17th, the interest rates on a 30-year fixed VA jumbo loan are 6.25%.
  • To qualify for a VA jumbo loan, the property must fulfill VA inspection requirements.

What Is a VA Jumbo Loan?

A VA loan is a government-backed loan that is exclusively for veterans. It has zero-down payments and flexible credit score requirements.

A VA jumbo loan is a loan that falls above the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loan limits vary depending on the area and range from $766,550 to $1,149,825.

What Are the Benefits of VA Jumbo Loans?

Since they don’t have an upper limit, VA jumbo loans allow you to borrow larger amounts than conventional loans. Apart from this, they have various advantages, such as:

  • Zero Down Payment: The lenders can offer to waive the down payment for the amounts as per the jumbo loan limit.
  • No Pre-payment Penalties: Since the government guarantees VA jumbo loans, they don’t carry any pre-payment penalties.
  • No Private Mortgage Insurance: Compared to other types of home loans, VA jumbo loans don’t require PMI.
  • Financial Assistance: The Department of Veterans Affairs provides monetary assistance to borrowers who struggle to pay their mortgage payments.
  • Flexible Funding Fee Payments: VA jumbo loans require a funding fee of 1.25% to 3.30% on first-time home purchases. However, you can include this fee in your loan and pay it with your monthly mortgage.

>> Know About Jumbo vs. Conventional Loans Here

What Are the VA Jumbo Loan Requirements?

Here are some requirements that you must fulfill to obtain a VA jumbo loan.

  • Credit Score Requirements: Although VA loans do not have credit score requirements, the lenders may set their own, which is mostly 620. However, in the case of these loans, the requirements are generally high because of the large loan value.
  • Down Payment: Your down payment depends on your VA entitlements. If you want to purchase a second home without a down payment, your entitlement must cover 25% of the loan value.
  • Debt-To-Income Ratio: A DTI is one of the core metrics lenders use to determine your creditworthiness. Most lenders prefer a DTI of 41% or lower in the case of VA jumbo loans.

Interest Rates Available for a VA Jumbo Loan

The interest rates that you get on a VA jumbo loan are almost the same as those on a VA loan. These rates primarily depend on market conditions and the investor’s behavior. It’s not always that you get a higher mortgage rate for a large amount.

Bottom Line

VA loans come with lenient and flexible requirements. On the other hand, jumbo loans have certain fixed requirements.

Moreover, VA jumbo loans allow veterans to borrow larger amounts of money. It has lenient qualification requirements in terms of credit score and down payments. However, you must check your VA entitlements before deciding on a loan.

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Frequently Asked Questions

Can I have two VA loans at the same time?

Although VA loans are mainly for the purchase or refinance of primary property, you can have multiple VA loans at the same time.

Can you buy a second home with a VA jumbo loan?

Yes, you can buy a second home with a VA jumbo loan. However, you must ensure your VA entitlements to avoid paying down payments.

Can my dad use his VA loan to buy me a house?

Yes, a parent who qualifies for a VA loan can buy a house for their children to occupy.

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