If you’re a military veteran who is looking to purchase a home, then you’ve likely considered a VA home loan. These affordable loans are a great option, with no down payment or mortgage insurance required. However, many veterans are not familiar with the VA home loan or the requirements surrounding it.
Case in point: many veterans are unaware of the limits placed on VA home loans. Here in Florida, the VA loan limit for 2019 is capped at $484,350, which is the most that can be borrowed at one time with no down payment. This is sometimes referred to a VA Jumbo Loan. This is the standard VA loan limit for fiscal year 2019 but in most cases there are loans that can be offered over the standard limit to qualified Florida veterans. Typically, these veterans will have a credit score of 580 or higher. And unlike the standard VA loan, these increased loans do require a down payment.
Interested in learning more about the VA loan limit? Keep reading below to find out how these requirements may affect your family's future.
The VA Jumbo Loan
This VA loan variation is called a “VA Jumbo Loan,” and the down payment that is needed is based on the difference in price between the home price and the standard loan limit. That would be the $484,350 maximum VA loan. The VA Jumbo Loan down payment will typically be equal to 25% of the difference.
An example of this loan in practice would be if the home price was $504,350, which is $20,000 over the standard limit. The borrower would need to put 25% of that $20,000 as a down payment, which equals $5,000. That's approximately 1% of the total purchase price of the home, which means this loan is a very attractive option for veterans.
If you compare this to a typical down payment on a conventional loan, which is often a minimum of 5%, it is a much better deal. It is also a better alternative than the Federal Housing Administration’s (FHA) home loan, which has a 3.5% down payment. The VA Jumbo Loan is also more likely to have better interest rates than both a conventional loan and a FHA loan.