Does VA set their own maximum loan limits?

Written byRuben CaginalpWritten byRuben CaginalpAssociate writerRuben Çağınalp is an associate writer for Bankrate, focusing on mortgage topics. Ruben CaginalpFeb. 8, 2022 /2 min

Does VA set their own maximum loan limits?

Written byRuben CaginalpWritten byRuben CaginalpAssociate writerRuben Çağınalp is an associate writer for Bankrate, focusing on mortgage topics.

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Ruben Caginalp

  • Feb. 8, 2022 /
  • 2 min read Edited bySuzanne De VitaEdited bySuzanne De VitaMortgage editorSuzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
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Suzanne De Vita

  • Feb. 8, 2022 /
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Since the elimination of VA loan limits in 2020, VA borrowers with full entitlement can borrow a larger mortgage without putting money down. That said, you cant borrow however much you want; youll still need to go through the standard loan approval process.

VA loan limits in 2022

In 2020, the U.S. Department of Veterans Affairs (VA) eliminated VA loan limits for eligible veterans, servicemembers and surviving spouses who have full entitlement. You have full entitlement  meaning the entirety of your entitlement is available for use  if you meet at least one of the following criteria, according to the VA:

  • Youve never used the VA home loan benefit
  • Youve paid a previous VA loan in full and sold the property
  • Youve used the VA home loan benefit, but had a foreclosure or short sale and repaid the VA in full

Borrowers with this level of entitlement do not have to make a down payment, and the VA will guarantee the mortgage lender up to 25 percent of the VA loan if the borrower defaults.

While VA borrowers with full entitlement arent subject to loan limits, there are limits for borrowers who have remaining entitlement, which could include those who have defaulted on a VA loan or those who already have an active VA loan.

When do VA loan limits apply?

VA loan limits apply if you have remaining entitlement, meaning that part of your entitlement has already been tapped. According to the VA, you could fall under this category if:

  • You have an active VA loan
  • Youve paid a previous VA loan in full and still own the property
  • You refinanced your VA loan into a non-VA loan and still own the property
  • You had a foreclosure or short sale and didnt repay the VA in full
  • You had a deed in lieu of foreclosure on a previous VA loan

The loan limit for VA borrowers with remaining entitlement is based on the county where the borrower lives. If the borrower defaults, the VA will only guarantee the lender up to 25 percent of the county limit minus the entitlement already used.

VA loan limits by county

For borrowers with remaining entitlement, the VA loan limits vary by county, and are the same as the Federal Housing Finance Agencys conforming loan limits.

What VA loan limits mean for you

VA loan limits dont limit how much you can borrow to finance a home  thats up to your mortgage lender, and could be based on your credit and other factors. Rather, the VA loan limit describes how much the VA will guarantee for the lender. If youre approved for a bigger mortgage (more than $144,000), youre free to borrow beyond these limits, but without full entitlement, you might need to make a down payment to do so. In other words, with a down payment, you could be able to borrow more than the county loan limit.

Now that VA loans no longer have limits for borrowers with full entitlement, first-time borrowers have no cap on the size of a zero-down payment VA loan. The VA funding fees, which most borrowers have to pay in order to obtain a VA loan, remain in place, however.

Remember, even if you have full entitlement and arent subject to loan limits, that doesnt necessarily mean you can get any size VA loan you want. Your lender will still need to evaluate your credit history, income and assets to approve you for a loan, and for a specific amount.

Learn more:

  • Best VA mortgage lenders
  • Compare current VA loan rates
  • VA home loan requirements for 2022

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