How much is a jumbo mortgage in High-Cost Counties and Areas in VA?
In this blog, we will cover and discuss Jumbo VA loans in high-cost counties and areas of the United States. Home prices vary from city to city, county to county, and state to state. For example, most areas in California are considered high-cost counties where the homes are higher than traditional median-priced homes. HUD and the FHFA have been increasing maximum loan limits on FHA and Conventional loans for the past six years due to increasing home prices. California has the most high-cost areas than any other state. Average home prices in California have home prices that average $670,500 versus the national median of $456,700 prices in the rest of the country.
Changes in the VA Loan Limits: What Are Jumbo VA Loans
VA loans used to follow the conforming loan limit until January 1, 2020, when the VA no longer has a maximum loan limit on VA loans. However, any VA loan over $647,200 is called a high-balance VA loan or VA Jumbo Loans. Today, there is no maximum VA loan limit on VA mortgages. The lending guidelines on traditional versus high-balance VA loans are the same. The only difference in high-balance VA loans is the pricing. Jumbo VA loans in high-cost counties have higher mortgage rates than traditional VA mortgage rates in median-priced areas.
Why VA Loans Are The Best Mortgage Program in the Nation
VA Mortgages are the best loan program in the United States. Active duty and retired members of the United States Armed Services with a valid Certificate of Eligibility (COE) can qualify for VA loans; The U.S. government created and implemented VA Loans to reward active and retired members of our Military for their service. Loan Limit on VA loans normally followed Conforming Loan Limits. However, the VA eliminated VA loan limit caps as of 2020. VA loans no longer have maximum loan limit caps. Any VA loans higher than the conforming loan limit of 2022 of $647,200 are called Jumbo VA loans.
The Veterans Administration Exempt Maximum VA Loan Limit Cap on Jumbo VA Loans
Loan Limit Guidelines on VA loans in most areas in the U.S. used to be capped at $647,800. Many counties in the U.S. used to have higher loan limits on VA loans. Counties that are classified as high-cost areas had much higher VA loan limit Guidelines. Many areas in California are considered high-cost areas. VA does not require any down payment. Borrowers can get 100% financing on VA loans without a loan limit cap effective 2020. There are no credit score requirements on VA Loans. There is also no debt to income ratio caps. This holds true as long as the borrower can get an approve/eligible per automated underwriting system (AUS). CLN is a lender with no overlays on VA loans. We will discuss Loan Limit Guidelines on VA loans in this article.
Jumbo VA Loans Limit Guidelines
Jumbo VA Loans Limit Guidelines allow home loans higher than $647,200 with 100% financing. However, this used to not be available in all areas. Only U.S. Counties that are classified as high-cost areas have higher VA loan limits. VA Loans higher than $647,200 were often referred to as Jumbo VA loans.
Homebuyers Have No Maximum Loan Limit Cap on Jumbo VA Loans
In most counties in the United States, there is no maximum amount borrowers can borrow with 100% financing. Any VA loans are higher than $647,200. is called VA Jumbo loans or high-balance VA loans. There is no difference in guidelines between traditional versus high-balance VA loans.
Lenders Overlays on VA Jumbo Loans by Mortgage Companies
Even though the VA has removed the maximum loan cap, many mortgage companies have lender overlays. So basically any homes that are priced at $647,200 or less, borrowers can get 100% financing at most mortgage companies. However, there are many counties where housing costs are much more expensive.
Jumbo VA Loans in High-Cost Areas
Many areas in California, New Jersey, Colorado, Illinois, Texas, Georgia, Florida, Michigan, and Pennsylvania have much higher home prices. Many counties in these areas are classified as high-cost. This means that VA has higher loan limits in high-cost areas. CLN has no lender overlays on VA loan limits. As long as the borrower gets an approve/eligible for VA loans, we can qualify, approve, process, and close.
VA Loan Limit Guidelines on VA Jumbo Loans in High-Cost Counties
Average home prices are $480,000. However, in California, the average home price is $679,870 for single-family homes. To assist with housing for veterans, VA has eliminated the maximum loan limit on VA loans. Every high-cost area has its own maximum loan limit on government and conventional loans.
For example, there is no maximum cap per VA loan limit Guidelines in Marin County, California on single-family homes. Homebuyers can qualify for high-balance VA loans with 100% financing. Higher loan limit VA loans that are higher than $647,800 are often referred to as Jumbo VA loans and/or High-Balance VA loans.
What If I Am Buying Higher Priced Home With Jumbo VA Loans
Homebuyers can purchase homes that are higher than $647,200 with VA loans with no money down. The U.S. Department of Veterans Affairs used to only guarantee lenders up to $647,200 on VA loans unless the property is in a high-cost area. Let’s take a case scenario where a home buyer is buying a $747,200 home with a VA loan.
VA High-Balance Loans in High-Priced Areas
VA no longer has a maximum VA loan limit on VA loans. We will use an example of how homebuyers qualified for VA loans over the conforming loan limit of $747,200. VA used to guarantee and allow 100% financing up to $647,200. The buyer is buying a home that is $100,000 over the VA Guarantee. Lenders will require home buyers to put down 25% on the overage that goes beyond the VA maximum loan limit. So in this case scenario, the home buyer needed to put a 25% down payment of the $100,000 overage which is $25,000. However, the homebuyer can now buy a home that is higher than $647,200 with a VA loan with zero money down and 100% financing.
Blue Water Navy Vietnam Veterans ACT of 2019
There is no maximum VA loan limit cap And VA loan limit changes. Part of public law 116-23, the BLUE WATER NAVY VIETNAM VETERANS ACT OF 2019, which just became law on June 27th, expands the disability benefits for those who served IN SHIPS off the coast of Vietnam during the war. Previously this law only protected those who served in-country or on inland waters, but this law has now expanded.
Who Can Qualify For Jumbo VA Loans
Thousands of Americans who served in ships off the coast of Vietnam during the war, and were exposed to Agent Orange. In this article, we will detail how this affects current veterans and the new VA mortgage guidelines to be put in place in 2020. We will discuss the No Maximum VA Loan Limit Cap On VA Mortgages. To help fund the expansion of disability benefits for approximately 90,000 veterans, the VA is removing loan limits for their VA home loans. This means No Maximum VA Loan Limit Cap.
Current VA Loan Limits On VA Mortgages
Under the current law, the VA loan limit in median-priced communities is the same as a conforming loan limit in each County Across the Nation. If the VA loan is higher than the conforming loan limit of $647,200, homebuyers can still qualify for a VA loan but the loan is called a high-balance VA loan.
Loan Level Pricing Adjustments on Jumbo VA Loans
The VA guidelines for VA jumbo loans are the same as traditional loans but there is a loan level pricing adjustments (LLPA). LLPAs due to high-balance VA loans mean the rates are higher than traditional VA loans in median-priced areas. The majority of counties have a loan limit of $647,200. Under the previous VA agency guidelines, a veteran was responsible for a 25% down payment for any difference above the maximum conforming loan limit. For example, if a Veteran wanted to buy a home for $747,200 in a county where the maximum conforming loan limit was $647,200, they need to put down $25,000.
- $747,200- $647,200 = $100,000
- $100,000* .25% = $25,000
Now, the homebuyer can get 100% financing on a home purchase of $747,200 with no money down since the VA no longer has a maximum VA loan limit.
VA Loan Limits Today on VA Mortgages
Currently, VA loan limits mirror the limits set by the FEDERAL HOUSING FINANCE AGENCY (FHFA) for conventional mortgages. These loan amounts typically change every calendar year based on market analysis. The standard loan limit for 2022 is $647,200. In high-cost areas, the maximum conforming loan limit on conventional loans is $970,800. However, VA loans no longer have a maximum VA loan limit on VA loans.
No Maximum VA Loan Limit Cap Starting January 1st, 2020
The new law of no maximum loan limit on VA loans went into effect on January 1st, 2022. The VA will no longer cap the size of a loan with the conforming loan limits. This will pave the way for a veteran who wants to buy a more expensive house without a down payment.
How Do the VA Calculate Borrowers’ Eligibility Requirements
Of course, the veteran must qualify based on credit and income but will no longer need a down payment no matter what type of house they are buying. The VA does not lend money directly to Veterans, they do guarantee to A lender that a Lee veteran is a good credit risk. Even in cases of default, the lender is paid.
How The No Maximum VA Loan Limit Cap Law Benefits Home Buyers In High-Cost Areas
It is estimated that the average home throughout the United States is valued at $230,000. So, this new change will not be necessary for all veterans. This new change and legislature will help thousands of veterans and their families and state such as California, Colorado, Maryland, and Illinois, just to name a few.
How Much Do I Need To Buy a Home
The down payment is the number one hurdle preventing Americans from entering into a mortgage. That is why a VA loan is an amazing tool for those who have served us. As a veteran, you are able to get over the down payment hurdle and start building equity in your home instantly.
What Is The VA Funding Fee on VA Loans?
In order to help fund the Department of Veteran Affairs, the funding fee for an active-duty veteran purchasing a home will increase from 2.15% of the loan amount to 2.35% of the loan amount for first-time use. Early indications look like the funding fee for subsequent use will be raised from 3.3% to 5%. This change is said to be put in place on January 1st, 2021.
Regulations on VA Mortgages
Congress is hoping that the increased money coming in from the combination of the larger funding fee and higher loan amounts will be enough to cover the disability benefits for Vietnam veterans and their children who are currently suffering long-term health problems from exposure to Agent Orange. Only time will tell, but many veterans looking to get a new home loan in high-cost areas are going to benefit from this law change.
Benefits Of VA Mortgages
The Department of Veterans Affairs (The VA) is the federal agency that insures VA Home Loans to Lenders in the event borrowers default and forecloses on their VA loans. The VA is not a lender. The VA does not originate, fund, or service VA Mortgages.
What Is The Role of the U.S. Department of Veterans Affairs
The role of the Department of Veterans Administration is to insure the VA Loans originated and funded by lenders that go into default. The VA will insure and partially guarantee the loss lenders take. Due to the government guarantee by the VA, lenders can offer 100% financing at low rates on VA loans. Our government created and launched VA loans to reward active and retired members of the United States Military with a certificate of eligibility with this phenomenal loan program. VA Loans are for primary owner-occupant properties only.
More on Traditional and Jumbo VA Loans
VA loans are the best loan program available in the United States and are limited to eligible veterans of the United States Military. In early June, the United States Senate approved a bill with regard to the new law that eliminated the VA loan limit. This bi-partisan bill was unanimously approved and waiting for President Donald Trump’s signature to make it officially into law. On Tuesday evening June 25th, 2019, President Trump signed the bill which is now law. A great victory for veterans who want to purchase a higher-end home.
VA Eligibility Requirements On Jumbo VA Loans
There are two types of VA Lending Requirements:
- Minimum VA Agency Guidelines
- Lender Overlays By Individual Lenders
Lender Overlays Versus Agency Mortgage Guidelines on Jumbo VA Loans
All borrowers need to meet minimum VA Agency Guidelines. However, lenders can have their own lending requirements called lender overlays. Capital Lending Network is expert in helping borrowers with bad credit get qualified and approved on VA loans with no lender overlays. We just go off the minimum VA Agency Guidelines. Here are the Minimum VA Agency Guidelines On VA loans:
- There are no minimum credit score requirements on VA loans as long as the borrower can get an approve/eligible per the automated underwriting system
- There is no maximum debt to income ratio requirements
- There is a two-year waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale
- Outstanding collections and charge off accounts do not have to be paid off to qualify for VA loans
- VA and FHA loans are the only two mortgage loan programs that allow manual underwriting
- Borrowers in Chapter 13 Bankruptcy Repayment Plan can qualify for VA loans during the plan without the Chapter 13 being discharged with Trustee Approval and manual underwriting
- There is no waiting period after the Chapter 13 Bankruptcy discharged date to qualify for VA Mortgages via manual underwriting
- VA allows up to 100% LTV on cash-out refinance mortgages
Now the maximum VA Loan Limit of $647,200 has been eliminated. There is no maximum loan limit on VA loans.
Qualifying and Getting Pre-Approved For Traditional and Jumbo VA Loans
Capital Lending Network can provide top-down service to all of our nation’s veterans. We are extremely aggressive with VA manual underwriting and even participate in special programs such as VA RENOVATION LOANS. We make it an effort to help our veterans as much as possible. It is the least we can do for the sacrifices our nation’s veterans have made. We are available 7 days a week to answer your mortgage-related questions. Please contact Mike Gracz on 800-900-8569 for more information on the VA loan products we offer. We will continue to keep you up-to-date on the new VA mortgage guidelines revolving and loan limits.