VA Loan Limits

A loan limit is an amount qualified veterans are allowed to borrow without making a downpayment on a home. Loan limits are one of the numerous benefits associated with the VA loan program. As you explore the different aspects of VA loans, J.G. Wentworth’s VA loan specialists will be there to assist you every step of the way. We will be available to answer any questions you may have concerning VA loan rates, eligibility requirements, and more. Here, we will explore everything that VA loan limits entail.

Loan Limits In Your Area

In most areas of the country, qualified military members and veterans can purchase a home with a value up to $453,100 without putting any money down. This conforming loan limit is set by the Federal Housing Finance Agency (FHFA) each year to keep pace with inflation and other factors. However, the loan limits can vary between each county and are tied to median home prices. If you are looking to purchase a house in a high-cost county, you may be able to exceed the above amount without making a down payment. For the highest cost areas, this conforming limit may be up to $679,650, as of 2018. Contact one of our VA loan specialists to determine the loan limits in your area.

VA loan limits are not a cap on the amount that you can borrow. Instead, they are a cap on the amount that the Department of Veterans Affairs (VA) will guarantee. The VA is typically willing to back up 25 percent of your loan within the loan limit--this is known as the VA Entitlement or VA Guaranty. It is the VA Entitlement that secures enough of the loan, so you don’t have to make a down payment or get Private Mortgage Insurance (PMI). 

Calculating Lending Limits

Here’s an example of how the VA lending limits are calculated. Keep in mind that every veteran's situation is unique, and this illustration is only provided to help you better understand the VA loan limit:

A veteran who is a first-time buyer has their full entitlement available, and they would like to purchase their dream home for $350,000. In their county, the current loan limit is $453,100. 

$453,100 x 25% = $113,275 -- This amount represents the maximum guaranty from the VA and the veteran’s total available entitlement.

$350,000 x 25% = $87,500 -- This amount is the total amount required between the guaranty and the down payment.

Remember, the VA will limit their guaranty to whichever of these two amounts is less. In this instance, 25% of the total loan amount is less than the county limit. Since $87,500 is less than the total available entitlement, the veteran should not have to make a down payment on their home.

If you’re unsure about your current entitlement or county loan limits, or you have any other questions relating to VA loans, don’t hesitate to contact us today. The home loan specialists at J.G. Wentworth are ready to answer all of your questions and assist you in your homebuying or refinancing journey.

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