07 Feb How Do I Know What My VA Loan Limit Is?
Many veterans and military members who plan to obtain a loan through the Department of Veterans Affairs (VA) are aware of the concept of loan limits. A conventional mortgage loan’s loan limit is the maximum amount a borrower can borrow.
If a borrower needs a higher loan amount than the conforming loan limit in their area, they will have to take out a jumbo mortgage loan with stricter requirements.
In this article, we’ll discuss how veterans can figure out what their VA loan limits are.
Related Article: The Ultimate Guide to a VA Loan
What Is a VA Loan Limit
Essentially, a VA home loan limit is the maximum amount that eligible applicants can borrow by using a VA-backed home loan without making a down payment. VA loan limits are the same as conforming loan limits set by the Federal Housing Finance Agency. For most counties throughout the United States, the limit for single-family residences in 2021 is $548,250, and for areas with high costs, such as parts of Hawaii and Washington, D.C., the limit is $822,375.
Veteran, service member, and surviving family members who still have their full entitlement no longer have loan limits. For loans over $144,000, the VA will guarantee up to 25 percent of the loan amount if you qualify for your full entitlement.
Related Article: Learn About the Additional VA Loan Options
Recent Changes to VA Loan Limits
The maximum VA loan limit for veterans who seek jumbo loans or those living in higher-cost markets will be eliminated on January 1, 2020. Due to this, veterans can get VA-backed loans without down payments no matter where they live.
Since VA loan limits are gone, the Department of Veteran Affairs can now support loans that exceed the conforming loan limit. Also, when it comes to veterans who wish to buy a home, H.R. 299 will temporarily raise the interest rates on certain loan types by 0.15-0.30%.
Veteran, service member, and survivor loans over $144,000 will no longer be limited for those with full entitlement. You will not be required to pay a down payment, and if you default on a loan over $144,000, we will deliver your lender up to 25% of the loan amount.
Your VA home loan limit depends on the county loan limit where you live if you have remaining entitlement. If you default on your loan, we will also pay your lender up to 25%, minus the amount of your entitlement you have already used.
With your remaining entitlement, you can get another VA loan either on its own or together with a down payment.
Related Article: How Do I Get a VA Certificate of Eligibility?
How Do I Find Out What My VA Loan Limit Is
You do not need to calculate how much entitlement you have if you have full entitlement VA loan because you don’t have a loan limit. You must figure out how much you are currently using if you have reduced entitlement and want to know how much you have left.
Your VA loan is guaranteed up to 25%. Multiply your loan amount by 0.25 to find out how much of your entitlement you’ve used.
Previous VA Loans
Veterans United Home Loans is a lender that the VA approves to help veterans. In many cases, the VA will require a copy of the closing documents from the home sale, so it is essential to keep all paperwork received from the title company during the closing process.
The process of restoring entitlements is not automatic, and borrowers must apply for restitution.
After the VA has processed the loan application and reinstated the borrower’s eligibility, the borrower can begin the application process for a new VA home loan, generally following the same guidelines as the previous loan.
No VA Loans
In the first “no,” the borrower did not put any money down. As part of the original G.I. Bill drawn up in 1944, it provided the special entitlement to returning service members to help them adjust to civilian life and get a fresh start as new homeowners.
We have closing costs to consider in our “no-no” equation. A VA no-no loan is where the veteran doesn’t have to pay any closing costs, and there is no down payment requirement.
However, the second “no” does not mean there are no closing costs; it just means the veteran does not have to pay them. The closing costs include appraisals, a credit report, and origination fees, among others.
What if the Purchase Price Is More Than the VA Loan Limit
As long as a down payment is provided to secure the portion of the loan not guaranteed by the VA, an individual with qualifying credit can obtain a loan above the county VA loan limit.
Veterans with limited VA loan entitlements may borrow a certain amount before they must make a down payment. The VA’s loan limits help determine this amount. If veterans have full entitlements, they can borrow as much as a lender is willing to lend them, all without putting up any money.
How Do County Loan Limits Affect My House Purchase as a Veteran
Your VA home loan limit depends on the county loan limit where you live if you have remaining entitlement.
Your remaining entitlement—on its own or with a down payment—can be used to apply for another VA loan.
How Much Can You Borrow?
You determine how much you owe by comparing your monthly payment to your monthly income and your entitlement amount. The VA loan limits in your area will determine the amount you can borrow.
Two things to know about the VA home loan benefit:
- There is no down payment required for VA loans.
- You can finance the funding fee for your loan if the sales price of your home is $200,000 or more.
VA loans are one of the best benefits you can get as a veteran, and a VA loan calculator is an excellent place to start. Not only can you learn how VA loans can affect your finances, but you can also find the right VA loan lender by using a VA loan calculator.
A mortgage loan that fits your needs begins with knowing your loan limit. Find out how much you can borrow with this Loan Limit Calculator. To determine your loan limit, the Calculator considers the type of mortgage you are seeking also, your city and state.