Understanding the VA County Loan Limit
04-28-2021 • MHS Lending
The VA Home Loan is one of the most powerful loans available and is reserved exclusively for military members and their families. While the VA Home Loan has been around for decades, it’s important that as a homebuyer you feel confident when purchasing a home. Understanding the ins and outs of the VA Loan as well as all fees and limits will help set you up for success from day one.
One of the questions many home buyers ask lenders and realtors when beginning their process is, “how much can I get with the VA Loan?” Depending on your circumstance, you may be subject to following what’s called a County Loan Limit. Luckily, in 2020, VA Loan limits were eliminated for active-duty military and veterans who have full VA loan entitlement. Read on to learn more about the limit and if it applies to you.
What Is The VA County Loan Limit?
Historically, the Department of Veterans Affairs who guarantees VA Loans set a loan limit for borrowers. This limit is referred to as the VA County Loan Limit and is determined by the location of the property you’re looking to buy. The County Loan Limit does not necessarily set the maximum amount you can borrow, it simply refers to the amount of money the government will guarantee. Buyers who are subject to the County Loan Limit can find other ways of purchasing a home above that limit, such as using the VA Jumbo Loan.
Who Does The County Loan Limit Apply To?
In 2020, the Department of Veterans Affairs announced that VA Loan Limits, including the VA County Loan Limit, are eliminated for qualified active-duty military and veterans who still have their entire VA loan entitlement. In order to still have your full entitlement you must fit into one of these three categories:
- You haven’t used your VA home loan benefit before
- You’ve had a VA home loan before but you’ve either paid it in full or sold the property
- You’ve had a VA home loan before but had a foreclosure and repaid the government in full
In any of these circumstances, you have full entitlement and therefore you do not have to follow the loan limits. Service members and veterans who already have active VA loans or who defaulted on a VA Loan will likely still be subject to VA loan limits. If you’re unsure of whether or not the limit applies to you, you’ll want to consult a VA-knowledgeable lender like MHS Lending who can help you determine what your buying power and eligibility are.
What Is The VA Jumbo Loan?
One of the most common myths about the VA County Loan Limit is that the limit sets the maximum house price you can qualify for. Rather than setting your house price maximum, the County Loan Limit simply tells you how much you can finance with no down payment. Anything beyond that can then be covered by the VA Jumbo Loan for those who are eligible.
VA Jumbo Loans are a great way to get into a higher-priced property while bringing significantly less money to closing. If you qualify, jumbo loans will require a down payment on the difference of the cost above the county loan limit rather than on the total sale price. This helps you secure a massive savings and get into the home of your dreams quicker.
At MHS Lending, we specialize in working with military families and veterans. Our diverse portfolio of products is designed to help you get the loan best suited to meet your needs. We want you to feel confident in your homebuying journey and our team is dedicated to helping streamline the process. If you’re ready to take advantage of your hard-earned military benefits, give us a call at 619-728-7620.