Is there such a thing as a Jumbo VA Loan?
Yes, the Department of Veterans Affairs has allowed Jumbo VA loans for years. The basic VA rule is that a VA loan is no down payment up to local loan limit, which follows the Fannie Mae conforming loan limit.
UPDATED: This limit is currently $424,100 in most of the country.
VA Loans allows for higher loan limits in certain higher cost counties in states like Hawaii, California, and Florida. Conforming loan limits in some of those area can be more than $417,000. You can check VA loan limits in your area here, (select the Fannie Mae option) but generally speaking, almost ALL of the country is at $417,000.
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To figure out how much down payment a veteran will need for a Jumbo VA Loan, simply take these steps: 1) Subtract $417,000 from the purchase price. 2) Multiply that amount by 25% (.25) 3) The resulting number is your down payment |
Normally a VA Home Loan is 100% financing, so NO DOWN PAYMENT is needed. But if you are looking for a VA loan in MN, WI, or SD over $417,000, you can still use a VA loan to buy the house.
For instance, assume in want to buy a home in St Paul or Minneapolis MN that cost $700,000. Subtract $417,000 (maximum limit in MN) from $700,000. The result is $283,000. Now multiply $283,000 times 25% (.25). The result is $70,750. This would be your jumbo VA loan downpayment.
Therefore the maximum actual loan amount would be $629,250. This works out to be 89.89% loan-to-value, or just over a 10% down payment.
A second example is a home in Madison or Milwaukee WI that is for sale at $650,000. The VA loan limit in Wisconsin is also $417,000. So subtract $417,000 from the $650,000 purchase price to get $233,000. Next multiply $233,000 by 25% to get $58,250. That's the down payment needed from the veteran in this example. That works out to about 9 percent down payment on a $650,000 home! How cool is that?
When compared to down payments required for conventional loans, the VA Program is difficult to beat, especially as there is NO Mortgage Insurance on VA loans, which is a HUGE saving advantage over other loans with less than 20% down.
For VA-eligible borrows, the VA Home Loan Guaranty Program is one of the best, if not THE BEST no money down home financing options out there. And, Jumbo VA loans, while needing a down payment, are no exception.
If you need a VA Jumbo Loan in MN, SD, or WI - call me at (651) 552-3681 or go to our VA Loan web site
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(C) 2012 - Joe Metzler - A LICENSED Mortgage Loan Officer lending in MN, SD, and WI only NMLS #274132. ReRe-blog but do not steal!
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