If you or your qualifying spouse has served in the Armed Forces for a period of time, you may already know that Veterans Affairs (VA) home loans are a popular advantage among service members, veterans, and certain spouses. Home loans backed by the U.S. Department of Veterans Affairs are a popular path to first-time homeownership, but VA loans may also be available for home refinances or purchase of a new primary residence.
Potential homebuyers or home loan applicants who want to learn more about 2024 VA loan changes may have heard their home options are constrained by a so-called “VA loan limit” which supposedly limits their ability to buy a home above a certain value. However, there is technically no maximum amount of money you may take out on a VA mortgage. In the VA’s own words, “as of 2020, if you have full entitlement, you don’t have a VA loan limit.” Keep reading to learn more about determining your VA home loan entitlement, and where to look up the limits the VA employs if you are already using a portion of your entitlement.
Understanding VA Loan Eligibility and Entitlement
In the context of a VA home loan, your “entitlement” reflects the guarantee that the VA makes to home lenders when you take out a VA loan. Veterans with full entitlement may be eligible to purchase a primary residence and enjoy the many advantages of a VA home loan. According to the Department of Veterans Affairs, you ought to have full entitlement if one of these conditions applies to you:
- You’ve never taken out a VA home loan,
- “You’ve paid a previous VA loan in full and sold the property” (your Certificate of Eligibility should show full entitlement)
- You’ve repaid any foreclosure or short sale on a previous VA loan.
Remember- if you have full entitlement, you should not have a loan limit when homebuying or refinancing using a VA home loan. Keep in mind, however, that your home lender may still require you to meet certain income or credit criteria in order to qualify for VA home loans. Consulting with a loan officer can help you learn more about VA home lending options for veterans and their qualifying spouses.
Want to know how to see the balance of your entitlement? There is a form called the “Certificate of Eligibility” (or “COE”) that you or your home lender can obtain from the VA. (Learn how to request your COE from the VA.) It is likely you will need this document when it comes time to apply for your VA home loan.
I Don’t Have Full Entitlement. What is the VA Loan Limit for the County I Want to Buy in?
If you have determined that you do not have full entitlement on your VA home loan, and need to learn the VA loan limit for the market of your would-be home, you will want to look up the VA loan limit by county. As of the time of this writing, according to the VA, “VA home limits are the same as the Federal Housing Finance Agency (FHFA) limits” which are also sometimes called “conforming loan limits.” In other words, if you do not have full entitlement, your options may be affected by the value of the property, and whether that price exceeds the conforming loan limit – the same as conventional and FHA home loans.
Those up-to-date conforming loan limit (CLL) values may be accessed on the site for the Federal Housing Finance Agency. The loan limits for each county in the U.S. are typically updated annually.
What Do I Do if I Want to Borrow Above the VA Loan Limit?
If you have full VA entitlement, you may purchase a home at any price a lender will approve you for. The federal government will guarantee up to 25% of your mortgage loan amount to the lender in the event you default. This was updated with the passing of the Blue Water Navy Vietnam Veterans Act of 2019, which did away with special loan limits for VA loans.
If you do not have full entitlement, and you are still interested in making a home purchase with a VA home loan, your VA home loan options may not have run out yet. The VA says, “You may need to make a down payment if you’re using remaining entitlement and your loan amount is over $144,000. This is because most lenders require that your entitlement, down payment, or a combination of both covers at least 25% of your total loan amount. So if you’re able and willing to make a down payment, you may be able to borrow more than the county loan limit with a VA-backed loan. Remember, your lender will still need to approve you for a loan.” This will depend on your VA loan eligibility.
What to Do with Your Knowledge of VA Loan Limits
Now that you understand where to find the current VA loan limit for your county, consider how these might affect your home purchase. Look at listings for homes you may be interested in purchasing, and perhaps contact a loan officer to help strategize the best financing options for your situation.
Interested in learning more about the Learning Center to help American servicemembers and veterans who are seeking to buy, build, or refinance a home. Check out “VA Loan FAQs” for some frequently asked questions concerning home loans backed by the Department of Veterans Affairs, or one of the many other helpful posts and resources for would-be homebuyers.
This information is intended for educational purposes only. Products and interest rates subject to change without notice. Loan products are subject to credit approval and include terms and conditions, fees and other costs. Terms and conditions may apply. Property insurance is required on all loans secured by property. VA loan products are subject to VA eligibility requirements. Adjustable Rate Mortgage (ARM) interest rates and monthly payment are subject to adjustment. Upon submission of a full application, a mortgage banker will review and provide you with the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.
