VA Jumbo Loans: How The Blue Water Act Changed Everything
For years, one of the most persistent misconceptions about VA home loans was that they were primarily designed for modestly priced homes.
A Veteran looking at a $900,000 home, a $1.2 million home, or a property in an expensive housing market might have assumed that a VA loan simply wasn't an option—or that a substantial down payment would be required.
That thinking is outdated.
On January 1, 2020, an important change took effect under the Blue Water Navy Vietnam Veterans Act of 2019. Among the law's provisions was a significant change to the VA Home Loan Guaranty program: county loan limits were effectively eliminated for eligible Veterans and service members with full VA loan entitlement.
For Veterans purchasing higher-priced homes, this was a major shift.
But there's an important distinction every Veteran should understand:
No VA county loan limit does not mean unlimited borrowing power.
Let's break down what changed, what didn't, and why this matters if you're considering a high-balance or "jumbo" VA loan.
What Was the Blue Water Navy Vietnam Veterans Act?
The Blue Water Navy Vietnam Veterans Act of 2019, signed into law as Public Law 116-23, is primarily known for expanding certain benefits related to Veterans who served offshore during the Vietnam War.
But tucked inside the legislation was a major change to the VA Home Loan Program.
Section 6 of the law changed how the VA guaranty works for larger loans by eliminating the previous limitation tied to conforming loan limits. The change became effective for qualifying VA loans closed on or after January 1, 2020.
That may sound like technical mortgage language, but the real-world impact is much easier to understand.
How VA Loan Limits Worked Before 2020
Before the change, VA's guaranty on larger loans was tied to conforming loan limits established for the area where the property was located.
Veterans weren't necessarily prohibited from purchasing a home above that threshold. However, once the loan exceeded the applicable limit, the VA guaranty could become insufficient to cover the amount a lender typically wanted guaranteed.
That often meant the Veteran needed to bring money to closing as a down payment.
This created a particular challenge for Veterans living in high-cost housing markets, where even relatively ordinary homes could exceed conventional loan thresholds.
The VA itself explained at the time that Veterans purchasing above the county conforming loan limit would likely have been required by their lender to make a down payment.
Then the law changed.
What Changed on January 1, 2020?
For Veterans with full entitlement, VA county loan limits no longer restrict how much can be borrowed without a down payment simply because of the home's price.
VA's current guidance is clear: if you have full entitlement, you don't have a VA loan limit, provided you qualify for the loan and the property's appraised value supports the transaction. For loans over $144,000, VA generally guarantees up to 25% of the loan amount for a Veteran with full entitlement.
Consider what that means.
A qualified Veteran with full entitlement could potentially use VA financing to purchase:
A $700,000 home
A $900,000 home
A $1 million home
A $1.5 million home
Or an even higher-priced primary residence
without making a down payment solely because the purchase price exceeds a county loan limit.
That's a very different VA loan program than many Veterans—and even some real estate and mortgage professionals—remember.
So, Is There Really No Maximum VA Loan Amount?
This is where the terminology can become confusing.
For a Veteran with full entitlement, VA does not impose a county loan limit on the amount a lender may lend.
But that doesn't mean a lender will approve any loan amount a Veteran requests.
VA specifically cautions that full entitlement does not mean a borrower automatically qualifies for a higher-priced home. The lender still determines how much the borrower can afford based on factors including income, debts, credit history, assets, and the overall loan profile.
Think of it this way:
The Blue Water Act removed a VA guaranty ceiling. It did not remove the responsibility to qualify for the mortgage.
A Veteran seeking a $1.5 million VA loan still has to demonstrate the financial ability to repay a $1.5 million mortgage.
What Does "Full Entitlement" Mean?
This is one of the most important pieces of the conversation.
The removal of county loan limits applies differently depending on whether the Veteran has full entitlement or remaining entitlement.
According to VA, you may have full entitlement when, for example, you've never used your VA home loan benefit before, or you've previously used the benefit but have had the entitlement restored after paying off or otherwise resolving the prior VA-backed loan under VA's restoration rules. Your Certificate of Eligibility (COE) is a critical starting point for determining your entitlement status.
If you have full entitlement, the county loan limit does not determine how much you can borrow without a down payment.
But if you've already used part of your entitlement and it hasn't been restored, the calculation changes.
What If You Already Have a VA Loan?
This is where high-balance VA financing becomes more complicated.
Veterans with partial or remaining entitlement may still be affected by county loan limits when determining the amount of VA guaranty available for another loan.
VA explains that when a borrower doesn't have full entitlement, remaining bonus entitlement is calculated using the applicable county loan limit minus entitlement already being used. Depending on the purchase price and entitlement available, a down payment may be necessary.
For example, imagine a Veteran purchased a home several years ago using VA financing and still owns that property with the VA loan outstanding.
Now that Veteran wants to purchase another primary residence using the VA benefit.
That may be possible.
But simply saying, "VA loans don't have loan limits anymore," would be an incomplete answer.
The lender needs to determine:
How much entitlement has already been used.
How much entitlement remains available.
The applicable county loan limit for the new property.
How much VA guaranty is available for the new loan.
Whether a down payment may be required.
This is one reason working with someone who understands VA entitlement—not just VA interest rates—is so important.
A Million-Dollar VA Loan Isn't Automatically a "Jumbo" Loan in the Traditional Sense
You'll often hear high-balance VA loans referred to as VA jumbo loans.
It's a useful shorthand, but it can also create confusion.
In conventional lending, "jumbo" generally refers to a mortgage exceeding conforming loan limits.
VA financing works differently.
For a Veteran with full entitlement, crossing a county conforming loan threshold doesn't suddenly eliminate the VA guaranty. The VA Lenders Handbook states that for loans above $144,000 with full entitlement, the maximum potential guaranty is generally 25% of the loan amount.
So a $1 million VA loan isn't simply a conventional jumbo mortgage with a VA label attached to it.
It's still a VA-guaranteed mortgage and still operates under VA program rules.
No Down Payment Doesn't Always Mean No Cash Needed
Here's another distinction worth making.
The ability to finance 100% of an eligible purchase doesn't necessarily mean a Veteran should expect to arrive at closing with zero dollars.
Depending on the transaction, there can still be closing costs, prepaid expenses, escrow requirements, appraisal considerations, and other costs associated with purchasing the home.
There is also the VA funding fee for borrowers who are not exempt, although VA permits the funding fee to be financed into the loan in many transactions. Certain Veterans, surviving spouses, and eligible service members are exempt from paying it.
And there is another critical factor:
The property still needs to support the purchase price.
VA states that the maximum VA loan on an individual property is generally the appraised value or purchase price, whichever is lower.
If you're purchasing a home for $1.2 million and the appraisal doesn't support that value, removing the county loan limit doesn't make the valuation issue disappear.
Why This Matters in Today's Housing Market
The Blue Water Act became law years ago, but many Veterans still don't realize what changed.
And that matters as home prices have increased.
A Veteran shopping in a higher-cost market may assume that putting 10%, 15%, or 20% down is simply the price of buying an expensive home.
That may not be true.
A qualified Veteran with full entitlement could potentially preserve a significant amount of cash by using VA financing instead.
For example, 20% down on a $1 million home is $200,000.
That doesn't automatically mean zero down is the best financial strategy for every Veteran. A borrower may intentionally choose to make a down payment for any number of financial reasons.
The point is that eligible Veterans may have a choice they don't realize they have.
Your VA home loan benefit doesn't necessarily become less valuable because the home you're buying is more expensive.
In some cases, it may become even more valuable.
The Catch: VA Guidelines and Lender Guidelines Aren't Always the Same
This is another area where Veterans can run into confusion.
VA establishes the rules for the VA Home Loan Guaranty program, but VA generally isn't the lender making the mortgage. Private lenders originate the loans.
And individual lenders can have their own requirements.
VA itself notes that while it doesn't establish a minimum credit score for VA-backed loans, individual lenders may. VA also cautions that some lenders may maintain additional lending criteria beyond VA's requirements.
Those additional requirements are often referred to as lender overlays.
This can become particularly important with high-balance VA loans.
One lender may have guidelines or maximum loan amounts that differ from another lender's. A Veteran who hears "no" from one institution shouldn't necessarily assume the VA program itself doesn't allow the transaction.
Sometimes the obstacle isn't VA.
It's the lender.
Why Who a Veteran Works With Matters
High-balance VA lending is an area where experience matters.
The larger and more complex the transaction, the more important it becomes to understand the Veteran's complete financial picture before making assumptions about what is—or isn't—possible.
That means looking beyond the purchase price.
A knowledgeable VA lender should be evaluating:
Full versus remaining entitlement
The Certificate of Eligibility
Income and employment
Monthly obligations
Residual income
Credit profile
Cash reserves and assets
Property value
Funding fee status
Lender-specific requirements
The Veteran's broader financial goals
The question shouldn't simply be:
"Can I get a VA loan this large?"
A better question is:
"How should we structure this purchase so my VA benefit works to my advantage?"
Those are two very different conversations.
The Bottom Line
The Blue Water Navy Vietnam Veterans Act of 2019 fundamentally changed what's possible with VA financing.
Since January 1, 2020, eligible Veterans and service members with full entitlement are no longer constrained by VA county loan limits when seeking a no-down-payment VA loan.
But remember:
No loan limit does not mean unlimited borrowing power.
You still have to qualify.
The home still has to support the value.
Your entitlement status still matters.
And the lender you choose can make a significant difference.
If you're a Veteran considering a higher-priced home, don't assume your VA benefit won't work because you've crossed some imaginary "jumbo" threshold.
Have your entitlement reviewed. Understand your options. Then decide which financing strategy makes the most sense for you.
Who a Veteran Works With Matters.
Jim Yarrington
Senior Mortgage Loan Officer
First State Bank Mortgage
NMLS #454680
👉 Apply online
📞 Call or text: 913-915-1855
All loans subject to approval. Equal Housing Lender.