The VA guarantees a maximum of 25 percent of your home loan amount - up to $104,250. The maximum new home loan amount of $417,000. If the house you are looking for is more than $417,000, it will require a VA Jumbo Loan. A VA Jumbo Loan is designed to be big enough to cover the size and cost of your home.
The term "jumbo" refers to any VA home loan greater than $417,000.
If you are a veteran and you want to purchase or refinance a home that exceeds $417,000, the VA Jumbo mortgage means you will simply need to pay the 25% on any amount over the defined limit $417,000.
This is a good example of a VA Jumbo Loan transaction:
The home costs $500,000. Your maximum VA home loan amount would be $417,000 with a $0 down payment. With the VA, you pay 25% of the amount over $417,000, which would be $20,750. In essence, you are purchasing your new home with a down payment of $20,750 plus closing costs. This is significantly less than a standard 10% mortgage down payment.
And now, veterans who qualify can apply for a VA Jumbo Home loan up to $1,000,000, with low (25% over $417,000) money down, under new VA Loans Maximum Guaranty Amount guidelines.