VA Jumbo Home Loans: A Comprehensive Guide

For veterans and service members, VA home loans offer incredible benefits like no down payment and flexible credit requirements. But what if you want to buy a more expensive home that exceeds standard VA conforming loan limits? That’s where VA jumbo loans come in.

A VA jumbo loan allows qualified borrowers to take advantage of VA financing while purchasing pricier homes in high-cost areas, Jumbo loans provide higher mortgage amounts than traditional conforming loans

This comprehensive guide will explain what VA jumbo loans are, their benefits, eligibility requirements, how they work, and tips for getting approved for one.

What is a VA Jumbo Home Loan?

A VA jumbo loan is simply a VA-backed mortgage that exceeds conforming loan limits set by the Department of Veterans Affairs. Here are some key things to know:

• VA jumbos allow bigger loan amounts, usually over $726,200 and up to around $1.5 million.

• They offer the same VA benefits like no down payment for qualified borrowers

• VA doesn’t actually set limits on jumbos – lenders do based on risk.

• Credit and income requirements are stricter than regular VA loans.

• VA jumbo loans have similar rates to conforming VA loans.

So in essence, a VA jumbo home loan gives veterans, active military, and surviving spouses access to VA financing for pricier real estate purchases.

Benefits of VA Jumbo Loans

VA jumbo loans provide several advantages over conventional jumbo loans:

• No down payment – Veterans with full entitlement can get a VA jumbo with 0% down.

• No mortgage insurance – No added PMI even with less than 20% down.

• Lower rates – VA jumbos often have lower rates than conventional jumbos.

• Less cash needed – VA requires less money down and smaller reserves.

• More flexible debt-to-income – VA allows higher DTI ratios than conventional loans.

• VA support – Access to VA resources if struggling to make payments.

For purchasers of high-value homes, VA jumbo loans can mean big savings compared to other financing options.

VA Jumbo Loan Limits

The VA doesn’t set official caps on how large a VA mortgage can be. But most lenders establish their own maximum VA jumbo loan limits based on risk, usually falling between $1-2 million.

The VA also doesn’t define an explicit threshold for what counts as a jumbo. But it’s commonly viewed as anything over the standard conforming loan limit of $726,200, up to around $1,089,300 in very high cost counties.

Lenders control VA jumbo loan policy. So maximum amounts and rates vary between different banks and mortgage lenders.

VA Jumbo Loan Requirements

While VA guidelines apply, lenders add more stringent requirements for jumbos to mitigate risk:

• Credit scores – Minimum 620 FICO but 720+ recommended

• Debt-to-income ratio – Typically below 50% front-end and back-end DTI

• Income history – At least 2 years of stable income sources

• Employment – Strong job history; self-employment needs 2 year minimum

• Reserves – Some lenders require as much as 18 months cash reserves

VA jumbo approval demands very good credit, income, and assets. But they’re more flexible than conventional jumbo requirements.

How VA Jumbo Loans Work

The process of getting a VA jumbo home loan is similar to a standard VA mortgage:

1. Get pre-qualified – Confirm loan eligibility and affordability.

2. Find a home – Make an offer once your VA pre-approval is issued.

3. Enter escrow – The lender handles appraisal, underwriting, and closing.

4. Close on the loan – Sign documents and receive the mortgage funds.

5. Make mortgage payments – Repay loan principal and interest over the term.

The main difference is the scrutiny of your finances and the higher purchase price. But the VA jumbo loan process itself is essentially the same.

5 Tips for Getting Approved for a VA Jumbo

Getting approved for a VA jumbo loan requires exceptional finances. Here are 5 tips to boost your chances:

• Shop multiple lenders – Compare quotes to find the best deal.

• Maximize your credit score – Shoot for at least 720+ FICO.

• Lower your debt-to-income – Pay down debts to reduce DTI.

• Grow your cash reserves – Have 12-18 months of mortgage payments in the bank.

• Provide all documentation – Fully verify income, assets, and VA eligibility.

Preparing a rock-solid application takes work. But it can lead to hundreds of thousands in VA jumbo mortgage financing.

Alternatives to VA Jumbo Loans

If you get denied for a VA jumbo, you may still have options:

• Conventional jumbo – Requires 20%+ down with stricter rules.

• Conforming VA loan – Buy a less expensive home within limits.

• VA hybrid loan – Combines VA financing with a piggyback HELOC.

• Down payment assistance – Grants or loans to cover larger down payments if needed.

• Co-signer – Add a borrower with better credit to strengthen the application.

Don’t give up if initially unsuccessful. Tweaking your approach can still make high-value homeownership possible.

The Bottom Line

VA jumbo home loans allow service members to buy premium real estate at competitive rates with minimal money down. While qualifying is tougher, VA jumbos open the door to millions in financing.

Veterans who need a mortgage exceeding conforming limits should absolutely explore this option. VA jumbo loans provide huge purchasing power with the signature benefits afforded to those who served our country.

But these loans require near flawless finances. So take time to optimize your credit, income, assets, and eligibility. With a meticulous application and smart lender shopping, you can obtain a VA jumbo loan to buy your dream home.