When the term “VA jumbo loan” is used, it technically refers to a high balance VA loan that is over $417,000. In this article I will talk about some of the unique aspects of VA jumbo loans in California.
First of all, a VA borrower can obtain a loan for a lot higher than $417,000 in California. With zero down payment a VA borrower can go up to the VA county limit for their particular county in California. For example, the San Diego County VA loan limit for 100% financing is $546,250. Some examples of other county loan limits are: Los Angeles $687,500, Orange $687,500, Sacramento $474,950, Riverside $417,000, San Bernardino $417,000 and so on.
But a VA borrower can also go way above these county limits with a small down payment. A quick calculation to figure out how much you would have to put down if you want to go above the county limit is: (purchase price-county limit)X25%. So for example if a VA borrower wanted to buy a $800,000 home in San Diego, you would take ($800,000-$546,250)X25%=$63,437. A VA borrower with full VA eligibility would only have to put $63,437 down to buy a $800,000 home in San Diego County. And of course if they wanted to buy a $546,250 house they could put zero down.
OK so back to some more unique features of VA jumbo loans. One unique aspect of VA jumbo loans is for borrowers with prior short sales. We have a niche where we can lend to a borrower only one year after a prior short sale if they keep their VA loan below $417,000. If the VA loan is above $417,000, the borrower would need to waittwo years after a prior short sale to qualify for a VA home loan. The rules for waiting period after a prior short sale for bankruptcy or foreclosure are the same for VA jumbo loans, which is only a two year wait.
Often times the VA underwriter can be a bit more conservative with VA jumbo loans vs. VA loans <$417,000. They may look for compensating factors if the debt-to-income ratios are high or if there are prior credit issues.