(Mar 25, 2023)
The VA loan program was designed to make homeownership available to military members and veterans who might not afford it otherwise. The VA makes homeownership easier for people who have served our country by placing limits on how much you can obtain with a VA home loan, according to your location, how many people are in your household, and the type of property you're purchasing.
If you're considering securing a VA loan, you should know its limits since they can influence your mortgage amount and interest rate. The Department of Veterans Affairs (VA) puts these mortgage limits in place, which helps service members who qualify to buy homes with VA loans. In this guide, we'll explain everything you need to know about these limits. Read on to find out how these limits might affect your VA loan application.
How Do VA Loan Limits Work?
VA loan limits can be confusing to veteran homebuyers and individuals working around the mortgage industry. There's a lot of wrong information and misconceptions on the internet about this particular loan's minimum and maximum limit. Most people tend to believe that VA loan limits represent to full mortgage loan you can borrow using the benefits of Veteran Affairs. However, the truth is that there's no depicted maximum limit on VA loans. You can secure as much as the lender is willing to offer.
Without characterizing a down payment, the loan limits define how much a qualified veteran borrower can get. Generally, the VA loan limit for most counties across the states is currently at $484, 350 which is a sizable amount without factoring in down money. However, in country's with a tad more expensive real estate market, the VA loan borrowers may still be left at a disadvantage even with a sizeable loan limit.
The good news is that the VA loan institutes counter the disadvantage by increasing the amount you can obtain without an additional down payment. In simple words, if you're considering buying a home in an expensive county, you'll get more entitlement than those buying in affordable areas. This can be an immense benefit, especially if you have a VA-backed loan or lost one in foreclosure.
Do All States Have the Same Limit?
No, all states have different limits. VA home loan limits vary by county throughout each state, so it's essential to know your county's impediments. Some states have high loan limits, and some have low limits. On the other hand, some states have different limitations within certain counties. For example, Florida has a $484,350 VA loan limit in Miami-Dade County; however, other counties may allow a little higher or lower limits.
VA loan limits are determined by county, so depending on where you live and purchase a home, you’ll be able to borrow up to a certain amount of money. The maximum loan amount for a VA mortgage is set by law, as is its minimum. That means regardless of how much money you want to borrow or how large your down payment is, there’s a cap on what you can get. The good news is that these caps are very high compared to other loan types; the bad news is that they might be too high depending on where you live.
If you're planning to buy in a state with a higher median home value, expect your VA loan limit to be higher. While many factors play into how much you can borrow for a home purchase with a VA mortgage (including credit score), borrowers should always check local restrictions before purchasing a home.
Do VA Loan Limits Change Annually?
VA loan limits change from year to year. VA mortgage loan limits are subject to change and fluctuate based on location and property price. Each year, VA publishes a new maximum guaranty amount that can be used to determine how much financing is available for any given home. Understanding how these limits work is vital for anyone planning on purchasing a home using a VA mortgage.
Traditional VA loans are capped at $484,350, but there’s an exception for larger mortgages. Known as VA Jumbo loans (because they exceed that limit), these mortgages require a more stringent vetting process than traditional VA loans and tend to be slightly less popular.
But with home prices rising steadily in some markets, jumbo mortgages are again gaining traction among veterans looking to buy homes with higher loan limits. VA Jumbo guidelines typically vary depending on the lender requirements and loan size, among other factors. However, they're considerably more lenient than military and veteran borrowers need for traditional jumbo loans.
Bottom Line
Not all states have the same VA loan limit. Individual counties and cities also impose their unique limits. To find out what limitations apply to you, contact your state's Department of Veterans Affairs or consult with a lender directly.
(Mar 25, 2023)
