VA Loan Buyer’s Guide: Eligibility, Benefits and How to Apply
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2023 VA Loan Limits

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If your military service makes you eligible for a VA loan, you may have an advantage over standard loan programs because there are no VA loan limits. That’s especially good news if you’re buying a home in an expensive part of the country and don’t have a lot of cash saved up. However, the U.S. Department of Veterans Affairs (VA) will only back larger loan amounts if you meet special requirements to qualify.

What are the VA loan limits?

VA loan limits are restrictions on how much a military service member can borrow when taking out a mortgage backed by the U.S. Department of Veterans Affairs (VA). Since 2020, veterans, active-duty service members and surviving spouses with full entitlement haven’t been subject to a loan limit set by a government agency.

This means a qualified VA borrower with full entitlement may purchase a single-family home above the conforming loan limits of $726,200 in 2023 without a down payment. The limit jumps to $1,089,300 for one-unit homes in high-cost parts of the country.

Why VA loan limits don’t restrict how much you can borrow

The Blue Water Navy Vietnam Veterans Act of 2019 eliminated loan limits for VA loans in order to give military veterans more buying power regardless of home prices. The new law also helps military borrowers avoid jumbo loans, which often require higher down payments and more stringent approval guidelines.

VA entitlement affects VA loan limits

VA loan limits may apply depending on how much VA entitlement you have, which is the dollar amount the VA will repay a lender if you default. You probably have full entitlement if you meet at least one of the following criteria:

  • You’ve never used your VA home loan benefits
  • You paid off a prior VA loan and sold the property it was attached to
  • You had a foreclosure on a prior VA loan but paid it in full

THINGS TO KNOW

If you’ve used your home loan benefits before, the best way to find out how much entitlement you have is to request a Certificate of Eligibility (COE) from the VA. You request a COE by logging into eBenefits on the VA website, by mail by filling out a VA Form 26-1880 and mailing it to your regional loan center. VA-approved mortgage lenders can also access your COE on your behalf.

When VA loan limits apply

Without full entitlement, your VA home loan limit is based on the county you live in and whether you’re making a down payment or not. VA-approved lenders will restrict how much you can borrower if:

  • You have a VA loan on another home you’re still paying back. This is common when active-duty VA homeowners are transferred but can’t sell their home before they move.
  • You paid a previous VA loan off but haven’t restored your entitlement. You can fix this problem easily by providing your lender with proof the VA loan was paid in full.
  • You paid off your VA loan by refinancing to a non-VA loan type. Keep your refinance closing paperwork handy in case your lender needs to give it to the VA to restore your entitlement.
  • You sold your home as part of a short sale or deed in lieu of foreclosure. Your lender may also set a waiting period before you can apply for a new VA loan after a short sale or deed-in-lieu of foreclosure.
  • You had a foreclosure on a previous VA loan that hasn’t been paid in full. You also need to wait at least two years after a foreclosure sale before applying for a new VA loan.

THINGS TO KNOW

Your loan amount is also limited by your monthly debt and income. Lenders divide your pretax income by your total debt to determine your debt-to-income (DTI) ratio, and VA sets the maximum guideline at 41%. Exceptions are possible if you have high credit scores or extra cash in the bank to cover several months’ worth of payment (also known as mortgage reserves).

2022 VA county loan limits

If you don’t have full entitlement and want to avoid a down payment, you’ll be restricted to conforming loan limits set by the Federal Housing Finance Agency (FHFA) for conforming loans. One thing worth noting: If you have money for a down payment, you may be able to borrow more than the conforming loan limits.

A jumbo VA loan is simply a VA loan at a loan balance exceeding the maximum conforming loan limits. Lenders may add their own qualifying requirements to make sure you can repay the higher loan amount. The biggest benefit of a VA jumbo loan over a regular jumbo loan is that you may not need a down payment if you have full entitlement, whereas jumbo loans typically require at least a 20% down payment.

Yes, as long as the lender has a program that allows you to borrow up to that amount. Not all VA lenders offer VA loan amounts above the conforming limits.

The maximum VA loan amount for 100% financing will depend on whether you have full or partial entitlement and the lenders’ guidelines for your area.

According to the VA guidelines, there are no VA loan limits, but lenders set their own rules and may cap how much money they lend to each borrower.

 

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