VA Jumbo Loans

Through the VA Loan Program, the Department of Veteran’s Affairs (VA) allows veterans to acquire a home loan with more favorable terms than conventional loans or where private financing might not be available. This is made possible by the VA guaranteeing a portion of the loan amount.  Some of the benefits offered by a VA loan include:
 
  • No down payment if the appraised value is not greater than the sale price
  • No private mortgage insurance (PMI) premium
  • No pre-payment penalty
  • Closing costs are limited by VA regulation
  • VA funding fees (up to 3.3%) can be financed with the loan
  • The VA Loan is an assumable loan which means a buyer can take over, or “assume” a seller’s existing loan.
A typical VA Loan is available for a maximum loan amount of $417,000. This can be greater in certain “high-cost” areas. Below are local VA loan limits.
 
County Single-Family Duplex Triplex Fourplex
Denver $424,350 $543,250 $656,650 $816,050
El Paso $417,000 $533,850 $645,300 $801,950
Weld $417,000 $533,850 $645,300 $801,950

Occasionally borrowers wish to purchase a home that exceeds this amount, but still want to reap the benefits of the VA Loan program. This is where the VA Jumbo Loan comes into play. A VA Jumbo loan is one that exceeds the standard conforming VA loan limit of $417,000, yet still offers the benefits of the VA loan program. Borrowers will still need to meet certain credit and income requirements as well as obtain a Certificate of Eligibility (COE) as they do with a standard VA loan. 

In addition to the typical requirements, a borrower must also make a down payment of 25 percent of the amount above and beyond the $417,000 limit. For example if a borrower wishes to purchase a $500,000 home, the difference between the two is $83,000. The borrower must make a down payment of 25 percent of the $83,000 which would be $20,750. This is roughly 4 percent of the total loan amount which is significantly less than the standard 10 percent down payment required for conventional loans. Conventional loans also require a private mortgage insurance (PMI) premium if the down payment is less than 20 percent. A veteran would need to put down $100,000 in order to avoid PMI premiums in this example.   

Even with higher down payment requirements and slightly higher rates than a standard VA Loan, it is still easy to see how much veterans can benefit from VA jumbo loan. The Pine Creek Financial Group is your local source for both standard VA and jumbo VA loans throughout Colorado Springs, Greeley, Denver, and Fountain. For more information on VA loans or to begin the application process, contact us today!


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