Can I Add the VA Funding Fee to a Jumbo Loan

By Kristine Tucker

The Veteran's Administration insures home mortgages for qualifying veterans who purchase real estate. The veteran is charged a VA funding fee that can be rolled into the total loan amount. If the purchase price exceeds the VA loan limit, the administration allows the buyer to obtain a jumbo loan, but the funding fee cannot be added to the jumbo loan amount.

The VA funding fee on a jumbo loan must be paid in cash at the time of closing. Either the buyer or the seller can pay the VA funding fee, but it cannot be rolled into the loan. The seller can pay up to 4 percent of the property value in seller concessions toward the buyer's closing costs. If the seller pays the funding fee at closing, he cannot exceed the 4 percent contribution limit.

In most areas, the maximum VA non-jumbo loan amount is $417,000. If the loan is under that amount, the entire VA funding fee can be rolled into the loan. If the loan is more than that amount, the funding fee must be paid at the time of closing. According to VA guidelines, a single-residence VA loan cannot exceed $1,000,000.

In some areas with high cost of living indexes, the VA non-jumbo loan limit is more than $417,000. The funding fee must be paid in cash at closing if the purchase price exceeds the area's loan limit. On loan amounts greater than the limit, a veteran still receives all the additional benefits of a VA loan.

A veteran does not have to pay any money down on the first $417,000 of a VA-funded home loan. The buyer must pay a 25 percent down payment on any amount greater than $417,000 or on any amount that exceeds than the local limit. According to VA Loans, a veteran must have a minimum credit score of 640 to obtain a jumbo loan exceeding $650,000. Mobile and manufactured homes do not qualify for the VA jumbo loan program. The buyer must secure a fixed interest rate to obtain a VA-insured jumbo loan.

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