How to Apply for a Jumbo VA Loan

If you are in the armed services or are a veteran, and would like to purchase or refinance a home with a value above the limits set by the Office of Federal Housing Enterprise Oversight (OFHEO) for conforming loans, then you will probably want to apply for a jumbo VA loan. The process is about the same as applying for a basic VA loan, but a larger down payment is required, and the rates will be slightly higher due to the additional financial risk involved. New limits are established each year and are effective January 1 – December 31 of that year. Notice that there are higher limits for residential areas defined as high cost areas.

To qualify for the jumbo loan, you will need to be able to make a down payment of at least 25% of the amount of the loan above the conforming loan limit. Hence, if you are looking to buy a house for $550,000 where the conforming loan limit is $417,000, then you need a down payment of at least one-quarter of the difference: ($500,000 - $417,000) x 0.25 = $20,750. You need to be able to make this payment without taking out a loan to cover it. If you cannot, then you will need to find a less expensive house so that you can consider a no-down-payment VA loan.

The house of your choice must pass inspection, not only to demonstrate that it is of basically sound structure, zoned as a residential unit, and such, but that the market value is relatively fair. It must serve as a primary residence within 60 days of purchase or completion, unless an extension is granted.

Find a lender. Lenders for jumbo loans are relatively scant since jumbo loans are, by definition, non-conforming loans and therefore cannot be purchased by Fannie Mae or Freddie Mac. They are also in less demand because their loans are usually financially out of reach. As you contact lenders, you should immediately ask about their policies regarding jumbo loans, and mention that you qualify for a VA loan.

Apply for a Certificate of Eligibility. If the lender has experience with VA loans, they may be able to help you apply. Otherwise, you can go to the VA website and fill out VA Form 26-1880. You will need to mail the form along with proof of service (either your DD214 or a Statement of Service from your commanding officer).

Be prepared with your financial information. Have your tax returns, bank statements, military benefits, child support orders, and any other important financial documents ready for evaluation by your lender. You will additionally want to demonstrate proof of employment. This will keep the process as simple and speedy as possible.

To close the loan, the following documents will need to be completed on your own or together with your lender:

  • Equal Credit Opportunity Act certification
  • Federal Collection Policy Notice
  • Good Faith Estimate
  • Interest Rate and Discount Disclosure Statement
  • Lender's general verification authorization form
  • Original Certificate of Eligibility showing sufficient entitlement
  • Signed purchase contract
  • Uniform Residential Loan Application
  • DD 214 or Statement of Service
  • VA 26-8497 and VA 26-8497a
  • VA Form 26-0551
  • VA Form 26-1802a
  • VA Form 26-8937
  • VA Funding Fee Exemption Memo
  • If you are on Active Duty, you will additionally need the Counseling Checklist for Military Homebuyers

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