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Jumbo Loans in Virginia: There are many communities throughout Virginia with higher home prices. There are luxury homes in urban and suburban neighborhoods near cities like Arlington, Richmond, Virginia Beach, Chesapeake, Norfolk and Washington, DC. There are resort towns and beachfront communities. There are large farms and ranches with expansive plots of land. And, of course, there are multi-unit investment properties. These types of properties tend to cost more than the average residential home. Virginia home buyers looking at high-cost homes may need to apply for a jumbo loan.
Virginia Jumbo Loans
Jumbo loans are prevalent throughout Virginia, but not every mortgage lender is willing and able to finance them. There is more risk involved with funding a jumbo loan because it is not insured by Fannie Mae or Freddie Mac. These government agencies insure a vast majority of home loans issued in the United States.
Virginia Conforming Loan Limits 2023
Each year, Freddie Mac and Fannie Mae coordinate with the Federal Housing Finance Agency (FHFA) to set “conforming loan limits” (CLLs). These limits are the maximum amounts that home buyers can borrow with government-backed mortgage loans. Any loan that exceeds the conforming loan limit will generally be considered a jumbo mortgage loan by the lender. Because it is not insured, the lender will likely have more stringent qualifying standards and put other protections in place to protect both themselves and the borrowers.
Conforming loan limits are set by region, based on the median sales prices from the previous calendar year. Most Virginia markets have the standard CLL for 2023, which is $726,200 for a single-unit home. The CLLs go up for multi-unit properties. Select counties and townships in Virginia have higher-than-average sales prices. Therefore, they have a higher conforming loan limit for single-unit properties this year, which is $1,089,300. This higher CLL is in effect in Arlington County, Culpeper County, Fairfax, Fairfax County, Falls Church, Fauquier County, Fredericksburg, Loudoun County, Madison County, Manassas, Manassas Park, Prince William County, Rappahannock County, Spotsylvania County, Stafford County, and Warren County. All other locations will fall under the standard 2023 Virginia conforming loan limits:
Standard 2023 Virginia Conforming Loan Limits:
• 1-Unit Homes – $726,200
• 2-Unit Homes – $929,850
• 3-Unit Homes – $1,123,900
• 4-Unit Homes – $1,396,800
High-Cost Market 2023 Virginia Conforming Loan Limits:
• 1-Unit Homes – $1,089,300
• 2-Unit Homes – $1,394,775
• 3-Unit Homes – $1,685,850
• 4-Unit Homes – $2,095,200
Any property exceeding these limits in a specific area will likely require a jumbo mortgage loan in Virginia. Home buyers will want to seek out a Virginia-licensed mortgage lender or mortgage broker who can offer jumbo home loan solutions.
Qualifying for a Jumbo Loan in Virginia
One of the most important factors for jumbo home loan qualification is your down payment. You can qualify for a Virginia jumbo loan with 10 down (a cash down payment of at least 10% of the home’s purchase price) if you have very strong qualifying standards. In most jumbo loan scenarios, the mortgage lender may require a down payment of at least 20%. The minimum down payment may be as much as 30% in some cases, generally when the borrower has weaker financial qualification standards.
Most Virginia jumbo loan mortgage lenders are looking for a credit rating (FICO score) of at least 680. The higher your credit score, the better chance you will have of qualifying for a jumbo loan. They will also usually require a debt-to-income (DTI) ratio of no more than 43%, along with proof of a consistent income—enough income to cover the higher-than-average monthly mortgage payments attached to a jumbo loan.
Virginia Jumbo Mortgage Rates
Most jumbo loans will have higher mortgage rates compared to conforming home loans. This should come as no surprise given the loan is for a higher amount and there is no government-backed insurance behind the funding. The stronger your qualification standards above, the lower your mortgage rate will be.
Jumbo loans will also typically require some form of mortgage insurance. PMI or MIP payments could be attached to your monthly mortgage payments unless you put down a large down payment. Jumbo loans with 10 down or even 20 percent down could require additional mortgage insurance as an additional layer of financial protection for both the lender and borrower.
Jumbo Loan Pre-Approval in Virginia
Your first step should be to reach out to a Virginia mortgage lender who offers jumbo loan products. See what it will take to get pre-approved for your jumbo loan and go through that process before you start your home search. Learn how much you are qualified to borrow, how much your estimated monthly mortgage payments will be, and strengthen your offers with a pre-approval letter from a reputable Virginia jumbo loan lender.
To get started with your Virginia jumbo loan application—or to ask any questions you have about jumbo loans—contact Moreira Team | MortgageRight today.