2022 Jumbo VA Loan Rates and Rules

VA Jumbo Loans: Another Great Option for Veterans

If you’re looking to take full advantage of your VA benefits and are VA eligible, a VA jumbo loan may be an ideal home loan solution.

With relaxed VA guidelines and down payment requirements, VA jumbo financing can provide a tremendous opportunity for qualified veterans looking to purchase or refinance.

And, finding a lender for your jumbo VA loan should be easy, as many lenders now offer jumbo VA loan products.

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What is considered a VA jumbo loan?

VA loans are generally considered “jumbo” when they exceed local compliant loan limits. If your loan is classified as a VA jumbo loan, it usually means you will be required to make a down payment. Also, the requirements to qualify for a jumbo VA loan may be stricter than for a VA loan below conforming loan limits.

About VA Loan Limits

Generally, VA loan limits correspond to conforming loan limits. In 2022, these limits are capped at $ in most of the United States, but can reach $ in areas known to be expensive.

It is important to note that VA loan limits do not do represent a ceiling on how many houses you can buy. Thanks to the abolition of VA loan limits in 2020, there is no maximum VA loan amount set by the government.

VA loan limits do not represent a ceiling on the amount you can borrow. Rather, they determine how much you can borrow before you have to make a down payment.

Instead, VA loan limits help determine how much veterans without their full VA loan entitlement can borrow before having to make a down payment.

These rules can vary from lender to lender, as each can set their own loan limits and down payment rules. But many use the compliance limit as a benchmark. Anything over the conforming limit is generally considered a higher risk loan and may require a larger down payment or better financials.

VA jumbo loan requirements

Underwriting guidelines for VA jumbo loans vary by loan size and lender. But you can expect the rules to be stricter than for a standard VA loan.

Most lenders want to see a credit score of at least 620 for a VA jumbo loan. For a non-jumbo VA loan, on the other hand, you may be able to qualify with a credit score of 580 or higher.

Depending on the lender, you may also need cash reserves to qualify for a high-cost VA loan. This means that you will need a number of months of mortgage payments in the bank at closing, as an added level of financial security.

Standard VA loans, on the other hand, generally require no cash reserve.

VA jumbo loan rate

VA jumbo loan rates are mostly comparable to regular VA loan rates. Your rate will not necessarily be higher simply because the loan amount is higher. However, this may depend on the lender.

Today’s 30-year fixed VA loan rates start at % (% APR) according to our network of lenders.

Like other VA loans, VA jumbo loan interest rates are lower than a conventional jumbo loan. And the underwriting guidelines are also more flexible than for a conventional loan option.

Advance payments on VA jumbo loans

For VA, jumbo, or other loans, a down payment may be required if you no longer have full entitlement. This may be the case due to either a prior VA foreclosure or one or more VA loans active at the same time.

With full VA loan entitlement, veterans technically do not need a down payment for a jumbo loan, regardless of the loan amount. According to VA regulations, if your lender says you can afford it, the VA will support it.

But, as explained above, many lenders require a down payment for VA jumbo loans despite Department of Veterans Affairs rules. This is because larger loan amounts are riskier and a down payment reduces the financial risk for the lender.

For example:

  • A lender can authorize VA jumbo loans of up to $1.5 million with no down payment. But you might need a slightly higher credit score for loans over $1 million
  • The same lender can authorize a loan of up to $2 million, but only with a score of 680 and a down payment of 10%. On an $850,000 home, a 10% down payment is $85,000
  • A conventional jumbo loan, on the other hand, may require up to 20% down payment to qualify for financing. A 20% down payment on an $850,000 home is $170,000

Since the rules can vary widely from lender to lender, it’s important to shop around and explore various options if you’re considering buying a high-priced home with a VA loan.

VA Jumbo Loan Funding Fees and Fees

Fortunately for jumbo VA mortgage borrowers, the financing fees for a jumbo VA loan are the same as for a traditional VA loan.

In 2022, VA financing fees can range from 0.50% to 3.6% of the loan amount depending on the purpose of your loan (purchase, refinance or cash refinance) and whether you have already used your loan advantage GOES.

When it comes to VA entitlement, there is more good news.

Previously, the VA capped the amount it would guarantee, which impacted how much you could borrow.

Today, since there is no longer a maximum loan amount, your entitlement works the same on a jumbo VA loan as it does on a standard VA loan.

Other Types of VA Loans

VA home loans, also known as Department of Veterans Affairs home loans, were designed to help eligible active duty military, reservists, National Guard members, veterans and surviving spouses.

According to VA Secretary Robert Wilkie, VA home loans have helped more than 25 million families since the program’s inception in 1944.

VA loans are a specialized loan program offered exclusively to qualified veterans. But, being a specialty product doesn’t mean they’re harder or cumbersome than their counterparts.

In fact, they tend to be easier to obtain than other home loans.

VA home loans come in different shapes and sizes:

  • VA purchase loan: Veterans and the military can use a VA loan to buy a new or existing home with $0 down payment and no mortgage insurance
  • VA IRRRL: the Refinance loan with reduced VA interest ratealso known as VA Streamline, is a simple, inexpensive refinance that typically requires no credit underwriting, income verification, or even an appraisal
  • VA Collection Refinance: Eligible veterans can use a VA Cash Refinance access cash on their home equity. Most lenders allow qualified veterans access to 90% of their home’s value, while some allow up to 100%.
  • VA Energy Efficient Mortgage: GOES energy efficient mortgage loan allows veterinarians to borrow additional funds beyond the purchase price for home energy efficiency improvements.

VA loans are also known to have more flexible eligibility requirements and lower interest rates.

Check your jumbo loan eligibility

House prices have risen sharply in recent years. This means more homeowners will be looking to finance their home purchase with a jumbo loan.

Thanks to the VA’s generous lending rules, service members and veterans can finance high-priced homes with less money and low mortgage rates.

The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.

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