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Gabe Amey
By Gabe Amey March 30th 2017 0 Comments

All You Need to Know About a VA Jumbo Loan

Note: As of January 1, 2020 the VA Loan Limit in Hawaii is NO LIMIT for pre-approved VA buyers with full entitlement. The rules of the VA Jumbo Loan will apply to VA buyers with remaining entitlement seeking to use their VA home loan benefits for more than one VA purchase. Please see blog post on Remaining Entitlement for an example scenario of calculations. Below is a 2019 blog post on how to calculate the down payment on purchases above the county loan limit prior to the 2020 NO LIMIT announcement.

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There’s no question that property values in our beautiful state of Hawaii are high, so it make sense that VA home buyers want to know, “What opportunity do I have to purchase a property that’s priced higher than the VA loan limit?” Can a veteran still use his or her VA home loan benefits to purchase a $900,000 home in Hawaii when the 2019 VA loan limit is $726,525?

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The answer is YES. It’s called the VA Jumbo Loan, and there are some important calculations to consider when pursuing it as your financing route. Primarily, how to calculate the amount needed for a down payment. Keep reading and we’ll make sure you have the Jumbo knowledge!

Let’s say you are the veteran seeking to buy a $900,000 home in Honolulu County and you have full VA entitlement. First, you subtract the county loan limits from the purchase price (assuming the appraised value is equal to or higher than the purchase price).

Example Scenario:

  • Purchase Price = $900,000
  • 2019 Honolulu County VA Loan Limit = $726,525
  • Difference = $173,475

Since the VA will guarantee 25% of the total loan amount, the veteran must cover 25% of the difference shown above:

  • Difference = $173,475 x 25% = $43,368.575
  • Down Payment = $43,368.75

Then, you subtract the down payment requirement from the purchase price and get your “Base Loan Amount”:

  • Purchase Price ($900,000) – (Down Payment) $43,368.75 = Base Loan Amount of $856,631.25

Remember, if you are not exempt from paying the VA Funding Fee and you plan on financing this fee into your loan, you will need to tack this on to your Base Loan Amount.

Quick Tip:

To reduce the VA Funding fee down to 1.5% of Base Loan Amount (from either 2.15% – 3.3% depending on first-time or subsequent use), ensure you are putting at least a 5% down payment.

In the above scenario, by putting an additional $631.25 down, or $44,000 total, the VA Funding Fee would be reduced to 1.5% or $12,840.

Base Loan Amount ($856,000) + VA Funding Fee of 1.5% ($12,840) = Total Loan Amount of $868,840. 

All Islands

If you plan on doing a VA Jumbo on Kauai, Maui, Lanai, Molokai or Hawaii Island, the VA loan limit is also $726,525 for your calculations.

To get prequalified, contact us at 808-792-4251 or fill out our online application and we’ll get in touch with you.

Jim Owens
By Jim Owens January 25th 2013 0 Comments

VA Jumbo Loans: How it works & how to calculate the down payment

2013 looks to be another great year to buy a home using your VA loan benefits. The rates are still at all time lows and the VA loan program remains essentially unchanged. The one change that does happen every year is the VA maximum loan amount. The loan amounts change from county to county. Here in Honolulu and the island of O`ahu, the maximum loan amount is now $750,000. The remaining islands / counties are still at $625,500. Check this link for the nationwide list of county loan limits.

In actuality, calling this number the maximum loan amount is a misnomer. This number is the maximum loan amount in the county for 100% financing. The VA provides lenders a guarantee of up to 25% of the loan amount or the county limit, whichever is less.

So, lenders will often finance a higher purchase price as long as the combination of the VA guaranty and the equity in the home equal 25% of the value of the property. In other words, a VA loan can be used to purchase a property at a price greater than the county limit, but a down payment will be required. This type of loan is commonly called a VA Jumbo loan. Let’s examine exactly how to calculate the down payment required when purchasing a home above the VA county loan limit:

Example:

  • Purchase Price: $950,000
  • VA County Loan Limit: $750,000
  • Difference: $200,000
  • Down Payment Requirement: $200,000 * 25% = $50,000

The simple answer is that the down payment requirement is equal to 25% of the difference between the purchase price and the county loan limit. ?In this case, the difference was $200,000, so the down payment is equal to one fourth of that, or $50,000.

This type of calculation can also be used if you have an existing VA loan in another area, but need to use your VA to purchase somewhere else.

Gabe Amey
By Gabe Amey January 20th 2009 0 Comments

VA Jumbo Loans: Up to $1 Million

For those retired veterans, active duty officers or dual income families fortunate enough to afford a home beyond the limit, the VA provides a great Jumbo loan option. VA Jumbo financing is readily available for loan amounts up to $1 million with a small down payment. The down payment requirement is 25% of the difference between the purchase price and the maximum VA Loan amount at 100% financing (currently $783,750 for Oahu in 2009). So, here in Honolulu, a purchase price of $1 million, would require a down payment of just under $55,000. With a small seller credit and today’s amazingly low interest rates, you could purchase a million dollar dream home with little more than 5% to cover the down payment and closing costs.

No other program offers a Jumbo loan with that little down; and best of all, no private mortgage insurance (a monthly savings of almost $675 at that loan amount). For those fortunate enough to be able to take advantage of this program, this could be an opportune time to trade up on your existing equity.

Erin Delgado
By Erin Delgado August 29th 2019 0 Comments

The 2020 No VA Loan Limit in Hawaii: How Will Remaining Entitlement Be Calculated?

Have you heard the news that the 2020 VA loan limit in Hawaii will be NO limit for veterans and servicemembers with full entitlement?! Surprise if this is your first time finding out! That means that there will be no VA loan maximum limit for zero down payment.

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UPDATE: Starting January 1, 2021 there will continue to be no VA loan limit in 2021 for VA borrowers with full entitlement. VA borrowers with remaining entitlement will have a new conforming loan limit in 2021.

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Translation: If a veteran or servicemember with full entitlement is pre-approved to buy a home for, say $2 million dollars, or ANY number above or below, he or she can purchase that home with their VA loan in Hawaii and make no down payment as long as they don’t have any other VA loan outstanding.

It’s a cause for celebration to have no loan size restriction. It may also motivate military and veteran home buyers to achieve their short and long-term financial goals towards getting pre-approved for the highest purchase price amount they can afford.

As the Hawaii VA Loans team readies for this change of how we do VA loans in Oahu and across all the Hawaiian islands, it’s essential to revisit the topic of VA loan remaining entitlement.

The first question is: Can a veteran or servicemember have more than one VA loan? The answer is YES, but with “No VA Loan Limit” in 2020, the second question becomes…

If there is no VA loan limit in Hawaii (or anywhere in the country), is there a “max available” for VA home buyers with remaining entitlement? 

The answer, again, is YES. There will still be a maximum available amount for a veteran or servicemember who is already a VA mortgage holder, but has remaining entitlement. The max available will be defined by the “conforming loan limit” set by the Federal Housing Finance Agency (FHFA) each year. In Hawaii, the 2020 Conforming Loan Limit is $765,600. On the mainland, it’s 2/3 of that (HI and AK get a limit that is 150% of the contiguous 48). This will be the loan amount used to calculate remaining entitlement for a VA mortgage holder.

Capt. Smith’s Remaining Entitlement Scenario

Let’s use the 2020 Hawaii conforming loan limit of $765,600 in our example scenario of using remaining entitlement, and keep the calculations simple.

Capt. Smith and his spouse are currently paying the mortgage on a $200,000 home  bought on the mainland with his VA loan. Upon being reassigned to Hawaii, they rented out their mainland home and desire to use Capt. Smith’s remaining entitlement for a VA home loan in Honolulu. His remaining entitlement would be $565,600 ($765,600 minus $200,000).

Capt. Smith makes sure to check his Hawaii Basic Allowance for Housing and sees that the estimated condo purchase price for an O-3 with dependents using his or her BAH toward a mortgage payment in 2020 is $617,603. He gets pre-approved with Hawaii VA Loans and finds a nice condo on the market to purchase for $606,525. Since he has his remaining entitlement, he can still buy the condo in Honolulu by putting down 25% of the difference between the purchase price ($606,525) and his remaining entitlement ($565,600). That difference is $40,925 in this scenario, so he would have to put $10,231.25 down.

Therefore, using your VA home loan benefits more than once with remaining VA loan entitlement works just like the VA Jumbo Loan, but at conforming loan balances set by the FHFA.

We Can Help You Become a Hawaii Homeowner!

As your local VA loan lender financing military home loans on the island of Oahu and all Hawaiian islands since 2007, we help veterans and servicemembers with many different types of financial scenarios become homeowners! Talk with a VA Loan Specialist at 808-792-4251 or get started online with our secure loan application.

Erin Delgado
By Erin Delgado August 13th 2019 0 Comments

Effective Jan. 1, 2020: The VA Loan Limit is NO LIMIT!

Hawaii Veterans & Servicemembers, have we got news for YOU!

The Veterans Administration officially announced the new VA Loan Limit set to take effect January 1, 2020. This time it’s very different. There will be NO LIMIT for veterans with full entitlement. Yes, that means if you can afford the payment (and get pre-approved) for a $2.5 million dollar home, then you can buy one using your VA home loan with $0 down payment! That’s right, ZERO down payment.

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UPDATE: Starting January 1, 2021 there will continue to be no VA loan limit in 2021 for VA borrowers with full entitlement. VA borrowers with remaining entitlement will have a new conforming loan limit in 2021.

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How Did This Major Change of No VA Loan Limit Come Around?

The change was implemented as part of the Blue Water Navy Vietnam Veterans Act of 2019, passed by Congress to support health care needs of a specific set of Vietnam veterans who served offshore of the Republic of Vietnam between Jan. 9, 1962, and May 7, 1975 and had contact with Agent Orange. In order to fund the program, Congress needs a revenue source, so the additional revenue from increased VA funding fees will go to support the costs.

Read the details of the “No Limit” announcement here:

https://www.benefits.va.gov/homeloans/documents/circulars/26_19_23.pdf

Are There Any Restrictions?

This zero down option is restricted to veterans that have their full entitlement available.  If a veteran has only a portion of their entitlement available, then the “remaining entitlement” calculation must be used and based on the FHFA standard conforming loan limit (essentially, maintaining the rules of the VA Jumbo Loan).

More About the New VA Funding Fees

First, what is the “funding fee?” The VA Funding Fee is a payment made at loan closing by a veteran or servicemember who uses their VA benefits to finance their home purchase. The fee can be paid by cash OR it can be financed (rolled into the loan).

Take a look at the new VA Funding Fee Table:

  • The VA has increased the VA funding fee by .15% (previously 2.15%) for all purchase and cash-out refinance transactions.
  • The old 0.25% increased funding fee for veterans who earned their eligibility through National Guard/Reserves service has been eliminated. The fee will be the same regardless of how the entitlement was earned.
  • There is a new funding fee exemption for active duty service members who have received a Purple Heart.

Big Reminder:

Here at Hawaii VA Loans, a division of Land Home Financial Services, Inc., we do not have a loan size limit for VA loans (many lenders do).

How Does the “No Loan Limit” Effect Buyers House Hunting Prior to Jan. 1, 2020?

  • If a buyer enters a contract with a closing date in 2020, this new “No Loan Limit” can apply to them.
  • Therefore, contracts entered in November 2019 – or earlier – can use this new rule if the close date is next year!

Our team of VA Loan Specialists are excited for the opportunities that the “No Loan Limit” change will bring VA buyers here in Hawaii. We look forward to working with many veteran and military home buyers who will not have to make a down payment on any home amount as long as they get pre-approved for its purchase price!

If you’re interested in becoming a Hawaii homeowner, we encourage you to begin our smooth and secure application process. As always, don’t hesitate to contact us with any questions at 808-792-4251. Aloha and happy VA home buying!

Erin Delgado
By Erin Delgado July 1st 2019 0 Comments

Inside the Event: Summer Summit 2019 | Presented by Hawaii VA Loans

At Hawaii VA Loans, we believe the events we host should be equally informative and fun. Why? Both elements should be part of the home buying experience! Sure, sometimes the fun factor can get lost in the stress that comes with house hunting, making offers, and getting finances aligned. However, Hawaii VA Loans helps VA home buyers and their agents eliminate those worries! Thus, our mission as Hawaii’s longest-running VA loan specialized lender is to support veteran/military home buyers and their real estate agents through our simplified approach and uncomplicated expertise.

Now that you know a bit about our approach, let’s go inside our most recent event!

On June 12th, real estate professionals from around Oahu attended Summer Summit 2019 presented by Hawaii VA Loans at Artistry in Kakaako. The late afternoon/evening event checked all the informative and fun boxes for Hawaii’s real estate agents. Here’s how it happened:

The event schedule began with Keynote Speaker Walter Thoemmes who shared Kamehameha Schools’ plan to bring 8,000 new homes to Honolulu’s urban core.

Attendees then received the most up-to-date and latest insight on how the VA loan program is performing here in Hawaii from panel members Jim Owens (Branch Manager, Hawaii VA Loans), Joseph Lorinc (Staff Appraiser, U.S. Department of Veteran Affairs), and Phoebe Nikolakakis (Broker-in-Charge, Coldwell Banker Pacific Properties, Kapolei Office).

Here are some important takeaways from the “What’s New Regarding VA Loans in 2019” panel discussion:

  • Nikolakakis shared that approximately 45% of home purchases in Kapolei/Waianae/Ewa areas are financed through the VA home loan program.
  • Lorinc emphasized the big change for 2019 came in the form of the VA loan limit. It was announced at the beginning of 2019 that the VA loan limit would be the same for ALL islands – $726,525. In previous years, the VA loan limit differed by several thousand dollars between islands. So for 2019, pre-approved VA buyers can purchase a home up to $726,525 on any island with no down payment required.
  • Owens followed up with information about the VA Jumbo Loan – an avenue within the VA loan program through which pre-approved buyers can purchase a home above the VA loan limit by making a relatively small down payment.
  • Owens reported that approximately 15% of Hawaii VA Loans purchase transactions are VA Jumbo Loans. Therefore, the majority are Hawaii VA home buyers who are putting no money down!
  • Lorinc discussed VA appraisals and how the VA is moving away from their appraisers being the “permit police.” Thus, allowing for more discretion when it comes to non-permitted improvements and additions.

Next, it was time to feast! Attendees dined on the award-winning cuisine of The Pig & the Lady, while listening to the cool sounds of John Akapo’s voice and guitar. What could be a better combo? We can’t think of many!

Meanwhile, Photo Ops Hawaii snapped these smiling faces around the venue!

The Aloha Modern ambiance for the evening was brought together by event planner Marichris Diga-Lazo of Co-Curate. Beautiful name tags were written and drawn out by Darrah of  @conceptuallydee for each of the attendees.

The staging backdrop of monstera, heliconia varieties, song of India, and palm fronds was meticulously created by Raina of @rainaameyart. The backdrop popped beautifully against the simplistic, modern lounge furniture courtesy of @roamrentalshawaii.

Speakers and Hawaii VA Loans team members were honored to wear a variety of lei creations made by Sherma & Charisma of @cns_bloomers.

Last but certainly not least, the support from the Summer Summit 2019 sponsors was invaluable to the event. Their involvement and presence was so greatly appreciated by the Hawaii VA Loans team:

Mahalo and aloha to the Hawaii real estate community for investing their time with us by attending Summer Summit 2019. We hope the next time you have a VA buyer, you’ll remember that Hawaii VA Loans is the island VA loan lender to call (808-792-4251) to help your client become a Hawaii homeowner!

Informative resources for you:

Agent Resources

Buyer Resources

 

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