Margarett Jurilla The Mortgage Expert,
Publish On: May 27, 2024
In this article, we will cover and discuss qualifying for high-balance VA loans in high-cost areas. High-balance VA loans are commonly referred to as Jumbo VA loans. We will cover everything about high-balance VA loans. The Department of Veteran Affairs no longer has a maximum loan limit on VA loans.
High-Balance VA Loans, or Jumbo VA Loans, are a type of VA loan designed to accommodate veterans and active-duty military members looking to purchase homes in high-cost areas.
VA high-balance loans exceed the standard VA loan limits and have specific requirements and benefits. However, VA loans that are higher than the 2024 conforming loan limit of $498,257 are called high-balance VA loans or Jumbo VA loans. The high-balance conforming loan limit for 2024 in high-cost areas is $1,149,825. In the following paragraphs, we will cover qualifying for high-balance VA loans in high-cost areas.
Key Features of High-Balance VA Loans
Loan Limits on VA loans do not exist. There are no maximum loan limit on VA loans. Standard VA Loan Limits: The standard VA loan limit for areas 2024 is $766,550 but it can be higher in designated high-cost counties. High-Cost Areas: VA loan limits can exceed $1 million in high-cost areas. For example, in some parts of California, the limit can be as high as $1,149,825. Again, there is no maximum loan limit on VA loans. Since the VA loan program’s changes in 2020, eligible veterans with full entitlement are not limited to VA loan limits and can borrow above these limits without a down payment, subject to lender approval.
Down Payment Guidelines on High-Balance VA Loans
No Down Payment: A down payment is not required for loans within the county loan limits. However, a down payment may be required for loans exceeding these limits. Calculation of Down Payment: For loans exceeding the county limit, the required down payment is typically 25% of the difference between the loan amount and the county loan limit.
Eligibility and Entitlement on VA Loans
Eligibility: The same eligibility criteria apply to standard VA loans, including service requirements and obtaining a Certificate of Eligibility (COE). Full Entitlement: Veterans with full entitlement can access high-balance loans without being limited by loan caps.
Benefits of High-Balance VA Loans
No Private Mortgage Insurance (PMI): Unlike conventional jumbo loans, VA loans do not require PMI, even for high-balance loans, which can result in significant savings. VA loans generally have more flexible credit score requirements than conventional loans, making them accessible to a broader range of borrowers. Veterans can purchase more expensive homes in high-cost markets without a substantial down payment.
VA Streamlined Refinancing
IRRL: The VA Interest Rate Reduction Refinance Loan (IRRRL) allows for easy refinancing of existing VA loans, including high-balance loans, to potentially lower interest rates. The property must meet VA standards and be used as the veteran’s primary residence.
Get Qualify For A VA Loan With US
VA Loan Application Process
Obtain a Certificate of Eligibility, often refer to COE. Secure a COE from the VA to confirm your eligibility for the loan. Work with a lender experienced in VA loans, particularly high-balance VA loans. Get pre-approved to understand your borrowing power and make a stronger offer on a home. The property must undergo a VA appraisal to ensure it meets the VA’s Minimum Property Requirements (MPRs) and is valued appropriately. By understanding the features and benefits of high-balance VA loans, eligible veterans and service members can make informed decisions about purchasing homes in high-cost areas.
What Is The VA Max Loan Limit For 2024
While most lenders limit VA loan amounts to $776,550 without a down payment, the VA has no established loan limit. However, any VA loan higher than the conforming loan limit of $776,550 is called high-balance VA loans or Jumbo VA loans. You can borrow more than $776,550 with a VA loan without making a down payment and get 100% financing. Prior to the VA not having a loan limit, the down payment required was 25% of the difference between the purchase price and $776,550. Some borrowers finance over $1 million with VA home loans.
VA Jumbo Loan Limits For 2024
To purchase a home for $876,550 with a VA loan, your down payment would have been $25,000 prior to the VA removing the loan cap. The difference between the purchase price and $876,550 and the maximum conforming loan limit is $100,000. 25% of the overage is $25,000. That used to be a down payment of less than 25% of the overage of the maximum conforming loan limit purchase price! However, the VA no longer has a down payment requirement on VA loans. Any VA loans with higher than a $776,550 loan limit are called high-balance VA loans.
VA Loan Jumbo Guidelines
There is no maximum loan limit for VA loans. VA loans greater than $776,550 are referred to as high-balance VA loans or jumbo VA loans. Jumbo VA home loans require down payments, but even with down payments, VA loans are often the best deal around. The required down payment is 25% of the excess purchase price over $776,550. That usually results in a down payment that is very low considering the purchase price.
In addition, there is no mortgage insurance requirement for VA financing. Finally, if you make a down payment of 5% or more of the purchase price, you pay a much smaller funding fee.
A 10% down payment gets you an even lower funding fee. There is no VA funding fee for 100% disabled veterans. Most counties in the United States will waive the property taxes on 100% disabled veterans. However, property taxes are included in qualifying for VA loans. After the veteran homebuyer close on their home, they would need to apply for property tax exemption on VA loans.
What Are High-Balance VA Loans?
What are high-balance VA loans? First, understand that the VA does not set loan limits at all. The VA used to limit how much they are willing to guarantee. Most mortgage lenders set their maximum loan amount at four times the amount of the VA guarantee. So if the maximum guarantee is $194,137.50, the maximum most lenders will finance with no down payment is $776,550.
Setting the maximum loan amount at four times the guarantee amount gives lenders a cushion in case they have to foreclose and sell the property.
As long as 25% of the loan amount is guaranteed by the government, lenders are unlikely to lose money in a foreclosure sale. That 25% is an important number. By making a down payment of 25% of the excess loan amount, you are still providing the same level of protection to the lender that the VA does with its guarantee. High-balance or jumbo VA home loans exceed $776,550, Gustan Cho Associates are experts in originating and funding high-balance VA loans with loan balances on VA loans greater than $776,550. VA loans has no maximium loan limits. Pre-Qualify For A VA Loans, click here
Benefits of Jumbo VA Loans
Homebuyers do not have to purchase homes in high-cost areas to qualify for a high-balance VA loan. They can purchase higher-end homes in any area with home prices higher than $648,200. Often, the down payment with a jumbo VA loan is lower than the down payment required for a conventional (non-government-backed) mortgage. Conventional jumbo loans usually require down payments of at least 10%. In addition, they require mortgage insurance payments every month. That can cost much more than the VA funding fee does.
See today’s mortgage rates.
Mortgage Rates on VA Loans
Competitive Rates: High-balance VA loans often come with competitive interest rates compared to conventional jumbo loans. Fixed and Adjustable Rates: Borrowers can choose between fixed-rate and adjustable-rate mortgage (ARM) options.
In addition, conventional loans come with higher interest rates and more expensive mortgage insurance if your credit score is not the highest.
VA Funding Fee: A funding fee is required for all VA loans, including high-balance loans. This fee can be financed into the loan amount or paid upfront. Additional Requirements: Some lenders may have additional requirements for high-balance VA loans, such as higher credit score thresholds or additional documentation. VA fees and rates do not have risk-based pricing adjustments. If your credit score is not sky-high, VA home loans can be much cheaper than other products. However, high-balance VA loans have loan-level pricing adjustments that is higher than standard VA loans.
Mortgage Guidelines on High-Balance VA Loans
Here are the minimum high-balance VA mortgage guidelines: VA loans do not have minimum credit score requirements.. Underwriting guidelines for VA home loans are flexible.. There is a two-year waiting period requirement after foreclosure, deed in lieu of foreclosure, short-sale to qualify for a high-balance VA loan. Borrowers in an active Chapter 13 Bankruptcy repayment plan can qualify for a high-balance VA loan. There is no mandatory waiting period after Chapter 13 Bankruptcy to qualify for a high-balance VA mortgage. VA loans can be manually underwritten. There are no differences in agency mortgage guidelines between standard VA loans versus high-balance VA mortgages. There is no maximum loan limit on VA loans.
Refinancing With VA Jumbo Mortgages
Homeowners with high-end homes can refinance with cash-out up to 100% of the property value. The maximum loan to value for traditional jumbo loans is 75% LTV. VA loans require no annual mortgage insurance premium. VA funding fees are waived for disabled veterans and/or surviving spouses. To qualify for a high-balance VA loan with a national mortgage company with no lender overlays, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
FAQs: High-Balance VA Loans (Jumbo VA Loans)
1. What are High-Balance VA Loans? High-balance VA loans also known as Jumbo VA loans refer to any VA loans that exceed the normal limits of a VA loan. They are meant for those veterans and active duty military who would like to buy homes in expensive places where the house prices are very high.
2. Is there a maximum loan limit for VA loans? Answering this question is not possible because the Department of Veteran Affairs (VA) no longer determines top limits for VA loans. Veterans with full entitlement can borrow beyond the standard loan limits without a down payment, subject to lender approval.
3. What is the loan limit for high-cost areas in 2024? For 2024, the maximum amount of money that should be borrowed under high balance conforming loan is $1,149,825 in high cost areas. The excessive amount of a VA loan beyond $498,257 goes into either a jumbo or high balance VA mortgage.
4. Do I need a down payment for a high-balance VA loan? You don’t have to make any down payment on such loans which remain within county borrowing bounds. Nonetheless, when these thresholds are surpassed; it means that borrowers must give out 25 percent of the total value minus county borrowing caps.
5. What are the eligibility criteria for high-balance VA loans? Essentially those veterans who qualify for one type will automatically be eligible for another one too. Prospective applicants must meet service requirements and have their Certificate of Eligibility (COE). A veteran having full entitlement has no restrictions on per-loan caps.
6. Are there benefits to high-balance VA loans compared to conventional jumbo loans? Yes, private mortgage insurance (PMI) is not required on such types of mortgages making them advantageous over other options. Also these versions have more negotiable credit standings as well as permit people who are on veteran status to buy expensive houses lacking any huge first time payment.
7. Can high-balance VA loans be refinanced? Yes, VA has a program called VA Interest Rate Reduction Refinance Loan (IRRRL) that can refinance high-balance VA loans. This is an opportunity to reduce the interest rate. The property should meet the minimum requirements of the VA and must be utilized as principal residence by the applicant.
8. What is the VA funding fee for high-balance loans? Any VA loan funding requires a payment of a funding fee including those with high balance limits. It may either be financed or paid upfront as part of closing costs. However, such fees can be waived for disabled veterans and surviving spouses.
9. How do I apply for a high-balance VA loan? Begin your application process by getting the Certificate of Eligibility from Veteran Administration. Afterwards, contact a lender frequently dealing in matters pertaining to the VA mortgage approval. Also this property must undergo valuation where it will have to satisfy Minimum Property Requirements (MPRs) according to their rules.
10. What should I expect during the VA loan appraisal process? On an important note, a house verification must meet Minimum Property Requirements (MPRs) and should be valued using right procedures. Even so, these steps are necessary for qualifying for loans.
11. Can veterans buy homes outside high-cost areas with a high-balance VA loan? Definitely, veteran home buyers can access such mortgages in other locations since they look at properties that go beyond normal borrowing limits; however housing might not necessarily cost more there all over again.
12. Are there any additional requirements for high-balance VA loans? Nevertheless certain lenders may require more details from borrowers or their FICO scores must reach some specific levels while giving such type of credit than others provide under normal conditions; financing against real estate always involves more complications.
Should you have any more inquiries or require help on high-balance VA loans, feel free to contact Gustan Cho Associates at 800-900-8569 or email gcho@gustancho.com. Our availability is full-time for all seven days of the week including evenings, weekends and holidays.
