High Balance Mortgage Loans With VA And FHA Financing

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High Balance Mortgage Loans With VA And FHA Financing

This BLOG On High Balance Mortgage Loans With VA And FHA Financing Was UPDATED On December 11th, 2018

High Balance Mortgage Loans are government and conventional loans that has higher loan limits than the standard $294,515 FHA Loan Limits. Also, standard conforming and VA Loans higher than $484,350  maximum Conventional and VA Loan Limits are considered high balance mortgage loans:

  • There are areas in the country that is more expensive than others
  • Those areas, like many counties in California is called high cost areas
  • A 2,000 square feet home on a quarter acre in San Francisco, California will cost much more than the same type of home in Springfield, Illinois
  • Both FHA, Fannie Mae, and Freddie Mac sets maximum mortgage loan limits each year for every county of every state in the U.S.
  • FHFA increased Fannie Mae and Freddie Mac Conventional Loan Limits to $484,350 for 2019
  • VA Loan Limits increased as well to $484,350
  • HUD, the parent of FHA, will most likely follow FHFA lead in increasing FHA Loan Limits for 2019
  • Any mortgage loan limits that exceed these loan limits is called High Balance Mortgage Loans or FHA Jumbo Loans and VA Jumbo Loans
  • Other terms used to referred High Balance Mortgage Loans are super conforming loans

Jumbo Mortgages

Gustan Cho Associates at Loan Cabin Inc. offers 95% LTV NON-QM Jumbo Loans with no mortgage insurance. Any government and/or conforming loans that is higher than $484,350 is called Jumbo Loans.

Fannie Mae and Freddie Mac did not raise Conventional Mortgage Loan Limits from 1980 until 2011.

  • Back in 1990, Fannie and Freddie decreased Conventional Loan Limits by $150
  • Any Conventional Loans that is higher than the general conforming limit is considered Jumbo Mortgages
  • Jumbo Lenders have much stricter mortgage lending guidelines
  • Mortgage Interest Rates on Jumbo Loans are higher than conventional and government loans
  • Many Jumbo Mortgage Lenders went out of business after the 2008 Real Estate And Credit Collapse
  • Sub-Prime Mortgages and Bank Statement Mortgage Loans totally disappeared until the recent introduction by lenders this year
  • Mortgage Regulators such as the CFPB realized the need of FHA Jumbo Loans, VA Jumbo Loans, and Conventional High Balance Mortgage Loans

Fannie Mae And Freddie Mac High Balance Mortgage Loans

High Balance Mortgage Loans was implemented on Conventional Loans by Fannie Mae and Freddie Mac starting in 2008.

  • In order to qualify for High Balance Mortgage Loans, it was not the borrower but the area needed to be located in a high cost area
  • If the property is not located in a high cost county, then the mortgage borrower does not qualify for high balance mortgage loans
  • The highest loan limit on a single family home with a high balance mortgage loans is capped at $729,750 
  • Hawaii, Alaska, U.S. Virgin Islands, and Guam, the loan limit on a single family home is capped at $1,094,625
  • High Balance Mortgage Loan Limits can change

FHA Jumbo Loans

FHA Jumbo Loans are very popular, especially in the state of California.

  • Many counties in California is classified as High Cost Areas so FHA Loan Limits on single family homes is capped at $679,500
  • HUD determines what the maximum loan limits of every county in the U.S. is and will designate certain counties as high cost counties
  • Not all states have high cost areas
  • There are states like the state of Iowa where there are no high cost areas
  • Illinois has three different loan limits as does dozens of other states

VA Jumbo Loans

Just like FHA Jumbo Loans, the Department of Veteran Affairs offers VA Jumbo Loans.

  • One great benefit with VA Loans is that VA Lenders can lend higher than the maximum VA Loan Limit
  • This holds true as long as the Borrower puts down 25% of any loan amount that surpasses the VA Loan Limit
  • For example, if the VA Loan Limit is $484,350, the veteran home buyer can purchase a $584,350 home with their VA Loan
  • 100% financing on the $453,350  plus the VA Lender will finance the additional $100,000 above the VA Loan Limit if the Veteran Borrowers puts down 25% of the $100,000 or $25,000
  • This is for home is non-high cost areas. With VA Jumbo Loans, there is 100% financing on high cost areas

Home Buyers who have any questions on high balance mortgage loans, please contact us at 1-262-716-8151 or text us for faster response. or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

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