VA Jumbo Loans

VA Jumbo Loans: Updated Rates & Requirements for 2024

VA loans offer an incredible opportunity for eligible active-duty service members, veterans, reservists, and qualifying surviving spouses to secure a home in North Carolina with favorable terms. However, if you’re purchasing a home in a high-cost area or need a loan amount beyond the standard limits, a regular VA loan might not be sufficient. That’s where a VA Jumbo Loan comes into play. Here’s everything you need to know about this specialized mortgage option for 2024.

What Is a VA Jumbo Loan?

A VA loan becomes a jumbo loan when it exceeds the conforming loan limits set for your county. For 2024, the baseline conforming loan limit has been increased to $766,550 for a one-unit property across most of the country. However, in high-cost areas, this limit can increase to $1,149,825. In special areas like Alaska, Hawaii, Guam, and the U.S. Virgin Islands, the limit can go as high as $1,724,725. A VA jumbo loan allows you to borrow above these conforming limits, provided the loan does not exceed the appraised value of the home.

Understanding VA Entitlement

VA entitlement is the amount the Department of Veterans Affairs guarantees to lenders on your behalf. If you default on the loan, your VA entitlement is the maximum amount the VA will repay the lender. If you’re using your VA loan benefits for the first time, or if you’ve fully paid off a previous VA loan and sold the property, you likely have full entitlement. This full entitlement allows the VA to guarantee up to 25% of the loan amount.

However, if you’ve used your VA loan benefits previously and haven’t paid off the loan, you may have a partial entitlement left, also known as impacted entitlement. With partial entitlement, you can still qualify for a VA jumbo loan, but if your loan exceeds the remaining entitlement, a down payment will be required to cover the difference.

VA Loan Limits & VA Jumbo Loan Limits

For most homebuyers using a VA loan, there’s no limit to how much you can borrow, if you have full entitlement. The VA’s guarantee is a fixed percentage of the loan amount, regardless of how much you’re borrowing. However, if you’re purchasing a home with partial entitlement, you will need to calculate your loan maximum based on your remaining entitlement. You can multiply your remaining entitlement by four to find your maximum loan amount. If you’re making a down payment, add that amount to your remaining entitlement before multiplying by four.

To check the exact conforming loan limits for your county, you can use the conforming loan limits map provided by the Federal Housing Finance Agency (FHFA).

VA Jumbo Loan Requirements

The qualifications for a VA jumbo loan may vary depending on the lender, but generally, you will face stricter requirements than a standard VA loan. Lenders typically require a minimum credit score of 620, and you may need to have cash reserves on hand. While down payments are often not required for VA loans, a down payment might be needed for jumbo loans, especially if you have a partial entitlement.

VA Jumbo Loan Rates

VA jumbo loan rates are generally competitive and often similar to regular VA mortgage rates. However, they can vary based on the lender, your credit score, and other factors. Importantly, VA jumbo loan rates are usually lower than those for traditional jumbo loans, making them an attractive option for eligible borrowers.

VA Jumbo Loan Funding Fees

As with all VA loans, a funding fee is required for VA jumbo loans. In 2024, this fee ranges from 0.50% to 3.6% of the loan amount, depending on your loan purpose and whether you’ve used your VA loan benefits before. Although this fee adds to your closing costs, VA loans do not require private mortgage insurance (PMI), which helps keep your monthly payments lower.

Pros and Cons of a VA Jumbo Loan

Pros:

• Lower Interest Rates: VA jumbo loans often have lower interest rates compared to traditional jumbo loans.
• Potential No Down Payment: Depending on your entitlement, you might not need to make a down payment.

Cons:

• Funding Fee: The VA funding fee can add a significant cost to your loan.
• Stricter Property Requirements: The home must meet the VA’s property requirements, which might be more stringent than other loan types.

VA Jumbo Loans vs. Traditional Jumbo Loans

Traditional jumbo loans, like VA jumbo loans, allow you to borrow above the conforming loan limits. However, they are not guaranteed by the VA and typically require a larger down payment, often around 20%. Additionally, traditional jumbo loans usually come with higher interest rates and more stringent credit and cash reserve requirements. In contrast, VA jumbo loans benefit from the VA guarantee, making them easier to obtain and often more affordable.

VA Jumbo Loan FAQ

What is a VA jumbo loan?

A VA jumbo loan is a VA-backed mortgage that exceeds the conforming loan limits for your county.

Does the VA allow jumbo loans?

Yes, the VA permits jumbo loans as part of its home loan benefit program.

How much do you have to put down on a VA jumbo loan?

The down payment requirements for a VA jumbo loan vary depending on your entitlement and lender criteria.

Can I get a VA loan for more than $1,000,000?

Yes, it’s possible to obtain a VA loan for over $1,000,000, but you’ll need to meet the lender’s requirements, including a strong credit score and sufficient cash reserves.

To gain deeper insights into how VA jumbo loans can empower your home-buying journey, contact our expert team at Certified Home Loans. As your dedicated mortgage specialists, we are committed to simplifying the process, ensuring you secure the best financing option tailored to your needs. Let us guide you through every step, turning your homeownership goals into reality. Call us today: 919-510-1108