Mortgage loans guaranteed through the Department of Veterans Affairs (VA) are an important benefit for many service members and veterans. VA loans, such as VA jumbo mortgages, are extremely flexible, allowing eligible people to obtain mortgages at highly competitive interest rates, no down payment, and no private mortgage insurance (PMI).

VA loan limits

Many qualified military borrowers can get confused by the loan limits for VA mortgages. In fact, there’s no maximum loan amount established by the VA. There are, however, limits to how much a qualified buyer can borrow without making a down payment. Originally, that limit was four times a veteran’s entitlement, which is currently $36,000, for a total of $144,000.

However, the VA abandoned that formula and set the maximum VA loan amount to match the loan limits set by government-sponsored entities Fannie Mae and Freddie Mac. That limit is $417,000 in most counties in the United States, with higher limits in some “high-cost areas.” In Florida, those high-cost areas are Collier County (limit $448,500) and Monroe County (limit $529,000).

Enter VA jumbo loans

What happens if you want to buy a more expensive home than the limit for your county? Are you out of luck? No. Remember, the VA has no maximum loan amount. The “limits” apply only to how much you can borrow without a down payment. So, if you want to buy a larger home, you can. You’ll just need a down payment.

Loans above the loan limits are called jumbo loans, and the VA has a formula for calculating how much down payment you’ll need. It’s 25 percent of the difference between your loan limit and the purchase price of the home you want to buy.

For example, if you live in Brevard County, where the limit is $417,000, and you want to buy a home that costs $517,000, you have to subtract your limit from the price ($517,000 – $417,000 = $100,000). Your down payment will need to be 25 percent of that difference, or $25,000 ($100,000 x 0.25 = $25,000).

We can help

There are other rules that apply to VA jumbo loans. For example, if you’ve used some of your loan entitlement already, and it can’t be restored right now, those numbers will change. At Embrace Home Loans, we’re experts in VA lending. We’ll work with you to help you understand VA jumbo mortgages and get you the loan you need. Call us today at 407-733-6425.

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