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Financing Options for First-Time Buyers of Ultra-Luxury Properties in Arlington

Melissa Ebong has extensive experience helping clients find ultra-luxury properties in Arlington, Virginia. Whether you are looking for something with unique historical features or a modern, one-of-a-kind estate, she can help you locate your dream home.

Ranked number two on a new list of "Best Cities to Live in America," Arlington offers residents an urban feel with an exceptional school district and unlimited access to upscale restaurants, chic boutiques, and corner coffee shops. Its proximity to Washington, D.C., provides ample opportunities to experience world-class entertainment with some of the country's best museums, galleries, theatres, and cultural exhibits located in one place.

The following information provides a comprehensive look at ultra-luxury financing options for first-time buyers, helping you better understand the available programs as you search for the perfect place in Arlington to call home.

What is considered an ultra-luxury property?

Luxury homes are the result of stunning architectural design, high-quality construction, first-rate amenities, high-tech security, and extravagant outdoor spaces. Ultra-luxury properties exhibit the same stunning features as luxury homes but offer a unique status reserved for the top 1% elite. The properties are typically located in the best part of town and offer panoramic views and breathtaking vistas of the surrounding area.

The influence of world-renowned international designers shines through custom-designed features and finishes throughout the home. Ultra-luxury properties can also offer first-rate amenities such as:

  • Infinity pools.
  • Rooftop lounges.
  • Grand foyers.
  • Floor-to-ceiling windows.
  • Movie theaters.
  • Fitness and spa facilities.
  • Boutique-style dressing areas.
  • Smart home technology.
  • Wine cellars.
  • State-of-the-art appliances.
An ultra-luxury property also offers a private sanctuary where homeowners can enjoy the peace and tranquility of the oasis they have created.

Types of mortgage loans available for purchasing an ultra-luxury property

Ultra-luxury financing options for first-time buyers can be tricky considering the cost associated with high-end properties in Arlington, but that's not to say it is impossible. First-time home buyers can apply for several types of mortgage loans when considering a high-end real estate purchase.

Conventional mortgage loan

A conventional loan meets the guidelines of both Freddie Mac and Fannie Mae. It is offered by private lending institutions, but it's not insured by the federal government. The requirements are not as flexible as the Federal Housing Administration (FHA) and other government-backed loans, but it is a popular type of loan for investors, since the property does not have to be owner-occupied.

In Arlington County, Virginia, the conventional loan limits are $1,089,300, meaning a borrower cannot exceed this amount and must find another financing source for the balance of the purchase price.

FHA loan

FHA loans are designed to assist first-time home buyers and those who may not be able to meet conventional mortgage requirements to secure a mortgage for a primary residence. The eligibility guidelines are typically flexible.

The down payment can be as low as 3.5% for qualified buyers with adjustable and fixed-rate options. Private mortgage insurance (PMI) is required and paid at closing or built into the mortgage loan.

Department of Veterans Affairs (VA) home loan

Active duty military, veterans, reservists, and surviving spouses can apply for a low-interest VA loan that offers favorable adjustable and fixed-rate options. A down payment is typically not required, and monthly PMI payments are not necessary. This government-backed loan is one of the most beneficial options for eligible borrowers, offering relaxed credit requirements and high loan limits based on an applicant's remaining entitlement.

According to the U.S. VA, loans have a funding fee between 1.25% and 3.3% of the property's purchase price that must be paid at closing or financed into the mortgage loan. Service members returning to active duty after receiving a Purple Heart, veterans receiving disability payments, or surviving spouses receiving indemnity compensation are exempt from paying this fee.

Jumbo mortgage loan

A borrower can apply for a jumbo mortgage loan when the amount of their conventional mortgage loan exceeds traditional loan limits. Since this type of loan does not conform to the guidelines of Fannie Mae and Freddie Mac, it is known as a non-conforming loan.

Jumbo mortgage loans have stringent rules and eligibility requirements regarding income, debt-to-income ratio, and credit score history. Most banks require borrowers to have significant cash reserves and ask for at least a 10% down payment. Closing costs are typically higher with a jumbo loan due to the additional administrative duties involved.

Eligibility criteria for a jumbo loan include:

  • A credit score of at least 700.
  • A debt-to-income ratio of 43% or less.
  • Cash reserves to cover one year of mortgage payments.
  • A loan-to-value ratio of 80% or lower.
With a jumbo mortgage, you can take advantage of a low minimum down payment, flexible terms, competitive rates, and the ability to finance more than the conventional limits of $1,089,300 to acquire your ultra-luxury dream property.

Frequently asked questions

There is a lot to consider when determining the best financing options for ultra-luxury home purchases as a first-time buyer, some of which may include:

1. Can I qualify for state or federal government first-time homebuyer programs when purchasing an ultra-luxury property in Arlington?

No. Most first-time homebuyer programs are for individuals and families with low-to-moderate income levels. Since you must be able to prove substantial income to secure a mortgage for a million-dollar property, these programs will not apply to your current situation.

2. What is the average price of an ultra-luxury property in Arlington?

According to The Institute for Luxury Home Marketing, as of July 2023, the median price for a single-family luxury home in Arlington is $1,134,450, with properties averaging only six days on the market.

3. Can I get a jumbo loan through the VA?

Yes. A VA jumbo loan has the same eligibility requirements as a VA loan, except it allows eligible applicants to borrow up to $2 million.

4. Do I need to get pre-qualified before looking at ultra-luxury properties in Arlington?

Yes. Most owners of ultra-luxury properties want to know that potential buyers are properly vetted before letting them into their homes. Providing your financial information to a lender for pre-approval can speed up the process, confirming you are a serious buyer and ready to take action.

Ultra-luxury financing options for first-time buyers are available

Melissa Ebong can help you navigate Arlington's competitive ultra-luxury real estate market. She understands that, as a first-time home buyer, you have unique needs and will go above and beyond to ensure those needs are met.

Arlington is one of the best places in the country to live, and Melissa Ebong can help you find an ultra-luxury property in this great city to call home.

*Header photo courtesy of Shutterstock

Work With Melissa

With over a decade of combined experience in real estate and public education, I have sharpened my skills in communication, negotiation, marketing, coordination and relationships. I absolutely love living in the Washington, DC metro area and I can’t wait to share my skills and knowledge with you as we sell or find your next home!

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