VA jumbo loans remain one of the best home financing options available to eligible veterans across Florida. This especially holds true for vets purchasing homes in more costly housing locations like Tampa, Jacksonville, Orlando, Miami, West Palm Beach or Sarasota. VA loans follow the standard conforming loan limits of $647,200 in Florida. However, some high-cost locations like Monroe County have base loan limits slightly higher.
UPDATE: as of 2020 VA loan limits will be removed, disregard below.
What many veterans are not aware of is they can borrow more than the standard imposed loan limit. Basically they will be required to put 25% down payment for any amount that exceeds the standard loan limit ($548,250 for most of Fla) So if a veteran exceeds the VA loan limit by $125,000 they would need to provide a down payment of 25% of that amount, or $31,250 in this case. Not a bad option when you consider how much down payment normal jumbo loans require these days. Let’s look at a few cases below –
VA Jumbo Loan Cases:
Case #1: John is a VA approved home buyer in Tampa, FL purchasing a home for $575,000.
- $615,000 purchase price, subtract $548,250 (maximum standard VA loan limit for Hillsborough County) = $130,650
- 25% of $30,650 difference is $32,663 = just over 5% down payment
- Just over 5% down payment for a VA Jumbo loan with no mortgage insurance
Case #2: Mary is a VA approved home buyer in Key Largo, FL purchasing a home for $700,000.
- $700,000 purchase price, subtract $529,000 (maximum standard VA loan limit for Monroe County) = $171,000
- 25% of $171,000 difference is $42,750 = just over 6% of the purchase price
- Keep in mind Monroe County (Key West, Key Largo) and Collier County (Naples, etc) permit higher base loan amounts.
VA Jumbo vs Regular Jumbo:
Both options can have “pros” and “cons” depending on many variables like loan amount, property location, down payment and credit profile of the applicant. There are standard jumbo options today that require only 5% down payment. However, these programs require very strong credit and payment reserves to qualify. VA is a little less restrictive on these requirements.
Also, when the home buyers down payment is less than 20%, regular jumbo loans are often processed into two separate loans (80/15 or 80/10) in order to avoid monthly mortgage insurance. VA loans don’t have mortgage insurance (PMI) and the program is one single loan. The VA loans can also have lower interest rates when you compare them with regular jumbo loans above 90% loan to value. Both programs will offer approved buyers with a choice of 15-30 year fix rate terms or adjustable-rate options.
Important VA Jumbo Mortgage Details:
- The VA jumbo loan will have stricter underwriting requirements when compared to a standard VA purchase loan. Borrowers should have a minimum 620 credit score with serious financial issues like Bankruptcy, Foreclosure, Repo in the previous 5 years.
- The standard VA purchase loan does not require payment reserves from home buyers. However, VA jumbo financing can require 2-4 months of payment reserves (savings in bank or retirement) since this program is not 100% financing like the regular VA loan.
- Vets should have their Certificate of Eligibility before they apply. Don’t have this? we can help you.
- Remaining VA entitlement is also important and something the VA loan specialist will review during the initial consultation.
Questions? Contact us today