Summary: Eligible borrowers looking to take out a VA loan may be able to secure a VA jumbo loan that is higher than county limits, but they may be required to make a down payment, which is typically not required in average cases where loans do not exceed county limits.
Washington State has a military population of more than 65,000 people. That means there are a lot of people who could benefit from using a VA loan to buy a house.
Over the last few years, however, home prices across Washington have risen steadily. In some areas, the median house price is now higher than the VA loan limit for the same county.
Fortunately, it’s possible to use a VA Jumbo loan to buy a house in Washington. Jumbo mortgages allow eligible borrowers to qualify for financing even when the purchase price exceeds the VA loan limits. A down payment is usually required in such cases, but it will likely be less than the down payment for a conventional home loan of the same amount.
Using VA Jumbo Loans in Washington State
In 2019, the VA limit for most counties in Washington state is $484,350. In the Seattle metro area — including the counties of King, Pierce and Snohomish — the VA loan limit is set at $726,525 to account for higher housing costs.
In some areas, median home prices have risen above these limits. This is especially true in the Seattle metro area, where house values have risen by double digits over the last few years, though prices have dipped since last summer and continue on a gradual downward trend. In Seattle, the median home price dipped to $714,100, a decrease of 4.3% since the same time last year.
In many cases, home buyers can find a suitable property without exceeding the limits. But that’s not always possible. And this is where the VA Jumbo loan comes into the picture. By making a down payment, eligible borrowers are often able to qualify for a VA-guaranteed mortgage loan that exceeds loan limits.
Related: How much can I afford with VA?
The General Rule for Down Payments
According to the U.S. Department of Veterans Affairs website: “The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment.”
The key part of that sentence is “without making a down payment.” This means you could potentially exceed the limit for your county, as long as you are willing to bring some money into the deal. How much money will partly depend on how far above the limit you need to go.
Home buyers who use VA jumbo loans in Washington State generally have to make a down payment of 25% of the difference between the loan limit and the purchase price.
For example, let’s assume a VA-eligible home buyer wants to purchase a house for $650,000. The property is located in King County, Washington, where the loan limit is currently set at $726,525. In this scenario, the difference between the loan limit and the purchase price is $76,525.
Again, the general rule for VA jumbo loans is that borrowers must make a down payment equaling 25% of the difference. So in this case it would equal a down payment of $19,131 (because .25 x 76,525 = 19,121).
That’s less than what the down payment would probably end up being for a conventional home loan. So even though a down payment is usually required for a VA jumbo loan that goes above the county limits, there are still benefits to using the program.