VA Jumbo Loan Limits, Rates And Requirements

VA loans are a great benefit for eligible veterans, active-duty service members, reservists, members of the National Guard and qualifying surviving spouses. These loans come with a lot of perks, including no down payment, fairly low interest rates and relatively flexible financial requirements in many cases.

But what happens if you live in an expensive area or just need a loan that’s a little bit bigger? A VA jumbo loan can help you buy or refinance that home and still use a VA loan to do it.

All that said, it’s important to have a good understanding of VA jumbo loans and how they work. That way, you can determine whether this option makes sense for you.

What Is A VA Jumbo Loan?

A VA loan is a government-backed loan, featuring some of the most attractive loan conditions available. These conditions include more relaxed credit requirements and, in most cases, the absence of a down payment requirement. VA loans are available through private lenders – but backed by government assurances – as fixed-rate or adjustable-rate mortgages.

A jumbo loan is a type of nonconforming loan because it exceeds the loan limits for conforming loans. It’s important to note that many VA loans don’t technically have limits on their size. However, lenders evaluate risk when approving mortgages, and that’s often where they draw the line on higher-risk loans.

Benefits Of A VA Jumbo Loan

With higher loan amounts and flexible credit requirements, VA jumbo loans can be ideal for qualifying home buyers. Here are some major pros to this type of mortgage:

• Qualifying borrowers can purchase more expensive homes with looser credit and down payment requirements.
• Home loans up to $1.5 million usually require no down payment at Rocket Mortgage^®.
• VA jumbo loans don’t require private mortgage insurance (PMI).
• The Department of Veterans Affairs (VA) can assist qualifying borrowers facing temporary financial difficulty.
• VA home loans have no prepayment penalties.

Is A Down Payment Needed On A VA Jumbo Loan?

VA loan down payment requirements depend largely on your loan amount. At Rocket Mortgage, no down payment is necessary for loan amounts up to $1.5 million if you have a median credit score of 640 or better. For loans in the $1.5 million – $2 million range, you’ll need a 10% down payment or 10% equity in a refinance. You’ll also need a 680 median FICO^® Score.

Likewise, a down payment might be required if you have partial entitlement. More on that in just a moment.

What Are The VA Jumbo Loan Limits?

Most people aren’t likely to have a limit on a VA loan. Beginning in 2020, the VA guaranteed the same percentage of the loan amount for lenders, regardless of the loan size, as long as you had full VA loan entitlement.

VA loan entitlements usually only limit your loan amount if you already own a house you financed with a VA loan and are looking to buy another home with a VA loan. Because VA loans are meant for primary residences, this won’t apply to most people.

However, the VA does allow individuals who’ve received permanent change of station (PCS) orders to keep their current home for up to a year while using a VA loan to buy another home in the new location. If this is your situation, you may not have a full entitlement when buying your second house. As a result, you may face a borrowing limit.

You might also have a partial entitlement if your home was sold in a short sale and you haven’t fully paid the VA back for the difference.

VA Loan Limits With Partial Entitlements

If you have a partial entitlement, your VA guarantee works differently. Your maximum loan amount depends on whether you’ll be making a down payment or if you have equity in your home. If this is your situation, the formula for maximum loan amount is:

(Remaining Entitlement + Down Payment/Equity) x 4

If you’re not making a down payment or have no equity, the following formula applies:

Remaining Entitlement x 4

Although the VA doesn’t limit the amount you can borrow, the above formulas are the policy of most lenders when you don’t have full entitlement for standard VA loans.

When Do Lenders Consider A VA Loan ‘Jumbo’?

While there’s no uniform number for this since the VA doesn’t limit how much you can borrow, most lenders consider a loan to be a jumbo mortgage if it falls above local conforming loan limits. Local VA loan limits will vary based on your number of units, and they’ll be higher in high-cost areas, but the standard limit for a conforming loan on a one-unit property in most areas in 2024 is $766,550. In high-cost areas, this limit can be as high as $1,149,825 for a one-unit home.

The other important number to look at is the upper loan limit that lenders have for their VA jumbo loans. At Rocket Mortgage, you can get a VA jumbo loan in any amount up to $2 million, assuming you can qualify.

If you have good or great credit and don’t have to make a down payment, a VA jumbo loan can end up saving you money on your house purchase.

What Are The VA Jumbo Loan Requirements?

In general, standard property and appraisal requirements for all VA loans apply to VA jumbo loans. Here are a couple of examples:

• The home has to be a primary residence.
• The home must pass basic inspections for safety and soundness. Depending on where you live, a VA loan termite inspection may be necessary.

Although the VA doesn’t set a minimum credit score to qualify, individual lenders set eligibility requirements. At Rocket Mortgage, the minimum required FICO^® Score for a standard VA loan is typically 580. The minimum score for a VA jumbo loan is 640. Though not usually required, a higher score may enable you to get a lower down payment or avoid one altogether.

Another factor that lenders weigh when considering your financial qualifications is your debt-to-income ratio (DTI). Expressed as a percentage, DTI is the sum of your monthly debt payments versus your gross monthly income. In many cases, VA loans allow you to qualify with a slightly higher DTI than you could with many other loan options. We qualify clients with a DTI of up to 60%.

Are VA Jumbo Loan Rates Higher?

VA jumbo loan rates are often similar to the interest rates you can get on a regular VA loan. It just depends on the appetite of the bond market at the time you apply for your mortgage. Your mortgage rate won’t necessarily be higher because the loan amount is higher, although it can be.

To get an idea of the VA loan rates, check out our mortgage rates.

How Much Is The Funding Fee On A VA Jumbo Loan?

Requirements for the VA funding fee on a VA jumbo loan are the same as a traditional VA loan. VA loans don’t have mortgage insurance, but the funding fee is intended to help fund the program, and you can often pay it upfront or have it financed into the loan amount.

The funding fee for regular VA loans is anywhere from 1.25% – 3.3% of the loan amount. The amount of the required funding fee depends on the size of your down payment (if any) and, in some cases, whether it’s your first use of a VA loan. VA Streamlines – also referred to as interest rate reduction refinance loans (IRRRLs) – are an exception to the range and have a 0.5% funding fee.

You’re exempt from the VA funding fee if you’re receiving VA disability payments or you’re a surviving spouse receiving dependency and indemnity compensation. Another exemption, added fairly recently, is for people who returned to active duty after receiving a Purple Heart.

The Bottom Line: A VA Jumbo Loan Can Be A Great Option

VA jumbo loans enable qualifying borrowers to get a bigger loan amount while enjoying many of the same benefits they would with a traditional VA loan. These include having no down payment if your credit score is high enough and the loan is small enough. It’s important, though, to review your credit score and entitlement status before choosing a VA jumbo loan to finance a home purchase.

Ready to pursue a VA jumbo loan? Start the initial approval process today with Rocket Mortgage. You can also give us a call at (833) 326-6018.