Editor’s note: Thanks to the Blue Water Navy Vietnam Veterans Act of 2019, VA loan limits are a thing of the past. Because loan limits are now repealed, there are no additional rules to get a large VA loan. In 2019, the standard VA loan limit was $484,350. Now, Veterans can get a VA loan of any size, depending on the maximum allowed by their lender. This post will be left intact for archival purposes, but as a Veteran, you can now get a jumbo VA loan under the same guidelines as with a standard VA loan.
Home Prices Rise, VA Loan Amounts Follow
The VA loan program is one of the most popular loan types on the market today.
Offered exclusively to eligible U.S. military Veterans and active duty service members, the VA home loan has enabled more than 22 million active and separated service members to buy or refinance a home.
Recent developments have made this loan type even more attractive.
In 2018, the nationwide “floor” VA loan limit has been raised to $510,400.
In more expensive locales, veterans can receive a zero-down VA loan up to $765,600.
2018 will be another great year for home buyers and homeowners seeking a VA mortgage.
2017 VA Loan Limits
VA loan limits are based on the location of the property
VA loan limits for 2018 are higher than those of 2017. This figure is equal to the conforming loan limits established by Fannie Mae and Freddie Mac.
VA loan limits are as follows:
- Standard: $510,400
- Designated high-cost areas: $510,400 – $765,600
- Special designation high-cost areas: $765,600.
The maximum VA loan limit is based on average home prices in the area.
Higher VA Loan Limits in High-Cost Areas
Most real estate in the United States falls under the $510,400 guideline but there are areas that warrant a higher limit. These areas are deemed “high-cost” areas.
The VA loan limits in Alaska and Hawaii are often higher than those in other areas, meaning you can likely go above the $765,600 limit.
Many counties across the U.S. allow loan amounts between the “floor” and “ceiling” amounts.
Pierce County, Washington, south of Seattle, allows a VA loan limit much higher than the loan limit in Sacramento, California.
Loan limits are generous all across the country. But, what if a Veteran wants to borrow more than the limit? That is allowed, by making a small down payment.
Calculating The Down Payment On VA Home Loans That Exceed the Limit
For VA mortgages above the VA-approved limits, there is still a way for the Veteran to take advantage of the VA loan program.
For instance, the VA loan limit is $424,100 and a home buyer wants a loan of $524,100.
A down payment will be required equal to 25% of the difference. In this case, the home buyer would come in with a $25,000 down payment (25% of $100,000)
Most lenders allow veterans to take out loans larger than the designated limit for their area as long as they make the required down payment.
Does a VA Streamline Refinance (IRRRL) Follow 2014 VA Loan Limit Rules?
According to the VA lending handbook, the maximum VA loan amount for a VA Streamline Refinance (IRRRL) does not need to follow 2017 lending limits if the limit in the county was lowered. The maximum VA streamline loan amount consists of:
- The existing VA loan balance
- The cost of energy efficient improvements up to $6,000
- Allowable lender fees and VA funding fee.
For instance, if you purchased a home in 2013 in Fairfax County, Virginia at the maximum loan limit at that time of $843,750, you could refinance that entire amount, even though the 2017 VA limit for that area is now $636,150.
Check Today’s VA Rates
One final reminder: just because the VA loan limit is $510,400 doesn’t mean you can qualify for that particular loan amount. Loan amounts are determined by the VA lender based upon current mortgage rates, personal income and current and future debt load. What you qualify for may not be VA’s limit.
On the other hand, you should have your own personal loan limit, the one you feel comfortable borrowing. Many borrowers, especially first timers or those who haven’t financed a property with today’s low rates can be surprised at the amount they can borrow. Be your own judge and get comfortable with your own mortgage payment and overall loan balance.