jumbo va loan in californiaCalifornia Veterans have been taking advantage of the VA Jumbo loan program in huge numbers in 2017 and 2018. A VA loan is considered to be a Jumbo VA Loan when it exceeds the county limit for 100% financing. While some down payment is required when going over the ZERO Down payment limit, it’s not much. Especially when you consider that many of the high cost areas of California have zero down loan limits as high as $679,650 in 2018.

If you’re looking at buying the California home of your dreams – and the price reflects it – then a VA jumbo loan may very well be the best option for your mortgage.

In most veteran loan scenarios, the VA guarantees up to 25% of the total amount of the loan up to the VA loan limit in your county – which, in much of the US, is $453,100.

But what happens when the value of the loan exceeds your California county VA loan limit?

This is where VA jumbo loans come into the picture.

For the purposes of this example, let’s say that you live in Orange County where the 100% financed VA loan limit in 2018 is $679,650. You find the perfect house for you and your family, and it’s selling for $779,650.

You decide that you would like to use your hard-earned veteran benefits to take out a VA mortgage!

So, the VA guarantees $169,912 of your loan (with $169,912 being 25% of $667,650). But what happens with the remaining $100,000 of the purchase price?

Simple. The U.S. Department of Veterans Affairs mandates that on VA jumbo loans above the county loan limit, the borrower put down 25% of the difference between the cost of the loan and the applicable county VA loan limit.

Continuing on with our VA Jumbo Loan example from above, 25% of $100,000 ($25,000) would be required as a down payment, and the VA would guarantee 25% of $679,650 ($169,912).

Not bad at all! In this example you’re buying your $779,650 California dream home for only $25,000 down in addition to the required closing costs.

The real value of VA jumbo loans is apparent when you compare and contrast it to the standard down payment requirement of a conventional mortgage, which is typically 20% to avoid paying private mortgage insurance, or between 5% and 10% down with mortgage insurance.

This means that for the example $779,650 house, and if you wanted to avoid monthly mortgage insurance, a Conventional loan down payment would be $155,930 while a VA loan down payment would only be $25,000. And no mortgage insurance. That may be the best part.

Please keep in mind while house shopping that VA county loan limits vary throughout California and will be higher in areas with especially high property values, like Orange county, Los Angeles county, Alameda, San Francisco, and a few others. Once again, the standard VA county loan limit is $453,100, but it’s smart to check with your local California VA mortgage lender prior to looking at houses.

For example, as of 2018 the 100% VA county loan limit for Orange County is $679,650! There are 25 counties in California with 100% loan limits higher than the standard $453,100 limit,

To check what the VA county loan limits are for each county in the United States, you can visit the U.S. Department of Veterans Affairs at their loan limit website. For counties that are not listed on the website, the official VA loan limit is automatically set at $453,100.

Why is there such as large difference in county loan limits throughout the nation? In short, because the various housing markets across the country vary greatly.

Wherever you are, if you are in need of a substantial home loan, a VA jumbo loan is certainly worth checking out.

*Updated on January 10, 2018 to reflect 2018 VA loan limits

Authored by Tim Storm, an California VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.