The connection timeout can be set with the timeout parameter (that indicated the number of seconds for the time out as described here) of the connect function.
ssh = paramiko.SSHClient()
ssh.set_missing_host_key_policy(paramiko.AutoAddPolicy())
ssh.connect(host, username=username, password=password, timeout=10)
sftp = ssh.open_sftp()
sftp.get(remotepath, localpath)
sftp.close()