If you’ve decided that you want to pursue a VA home loan to get into your dream home, but you don’t know just how much you might qualify for, knowing how much it’s possible to qualify for is helpful.
Because we know how confusing it can be to navigate the home loan market, we did our best to put together some information to help you figure out the VA loan limits in your county (or the county you want to live in) so that you have a better idea upfront what to expect.
What is the VA Home Loan Limit?
The first thing you should know about VA home loan limits is that the phrase probably doesn’t mean what you think it means.
Looking at it, you would probably assume that it means the limit on how much the VA will allow you to borrow under a VA loan. While that is a common assumption, it’s not the case.
The VA doesn’t have a maximum limit on how much you can borrow to buy a home. What they limit is how much of that loan they will back before requiring you to make a down payment. In other words, they don’t tell you how much of a loan you can take out—they simply let you know how much of that home loan they are willing to back.
In turn, this affects how much the lender or bank is willing to loan you without requiring that you make a down payment. Usually, if you go over the VA home loan limit (meaning you borrow more money than the VA is willing to back), the lender will require you to pay 25% of the difference.
For example, the VA Home Loan Limit for most loans at the time this article was written (July 2019) is $484,350. If this sounds familiar, that is because it is the same as the Freddie Mac conforming loan limit, which is set each year by the Federal Housing Administration (FHA).
That means that is the highest amount that the VA will back without a downpayment. If you decide to take out a loan for $500,000, your lender will likely require you to make a down payment on the difference ($15,650). Most lenders will require a 25% down payment, so you would expect to provide around $3,912 as a down payment.
The part that makes this process so tricky is that there isn’t a set loan limit for the entire country. There aren’t even state-enacted loan limits. In fact, loan limits are set at the county level. So, you could look at two homes that are on either side of a county line and be faced with entirely different loan limits. What’s more is that the loan limits are re-assessed every single year, so the loan limit for last year may not have carried over into this year.
In short, the VA Loan Limit is the highest-priced home you can buy with a VA Loan without making a downpayment.
High-Cost Counties Have Higher VA Mortgage Limits
VA home loan limits are also affected by housing costs in that particular area. We all know that not all housing markets are built the same. For example, $484,350 might be enough to get you the best house around in a rural area, whereas it wouldn’t get you as far in cities like New York City or Los Angeles.
Because of the discrepancies in housing markets across the United States, some counties are considered high-cost compared to others. These counties have significantly higher VA mortgage limits, with the current highest being $726,525.
The reasoning behind VA mortgage limits being higher in high-cost counties is that the VA doesn’t want eligible service members in those areas to only be able to afford low-quality housing. They don’t want something outside of the veteran’s control (like property value and local housing costs) to prevent them from being able to live in a nice home.
According to current research, states with high-cost counties include Alaska, California, Colorado, Connecticut, Washington D.C., Florida, Georgia, Guam, Hawaii, Idaho, Massachusetts, Maryland, Mariana Islands, North Carolina, New Hampshire, New Jersey, New York, Tennessee, Utah, Virginia, the Virgin Islands, Washington, West Virginia, and Wyoming. If you don’t live in those states, the VA loan limit is likely $484,350.
To find out exactly what the VA Home Loan Limit is in your county, you can check out the following table, which lists each county with higher loan limits:
|State||County or Area||2019 VA Limit||Regional Loan Center|
|Alaska||Kusilvak Census Area||$726,525||Denver|
|Alaska||Lake and Peninsula||$726,525||Denver|
|Alaska||Petersburg Census Area||$726,525||Denver|
|Alaska||Prince of Wales||$726,525||Denver|
|Alaska||Wrangell City Area||$726,525||Denver|
|California||San Luis Obispo||$667,000||Phoenix|
|District of Columbia||District of Columbia||$726,525||Roanoke|
|Mariana Islands||Northern Island||$524,400||Honolulu|
|New York||New York||$726,525||Cleveland|
|Virgin Islands||St. Croix||$726,525||St. Petersburg|
|Virgin Islands||St. John||$726,525||St. Petersburg|
|Virgin Islands||St. Thomas||$726,525||St. Petersburg|
|Virginia||Fairfax Independent City||$726,525||Roanoke|
|Virginia||King and Queen||$535,900||Roanoke|
|Virginia||Richmond Independent City||$535,900||Roanoke|
How to Buy a Home Over the Limit
If you already know that the home you want is above the VA home loan limit, you might be wondering what your next steps are. Here are a few things to keep in mind:
You will have to make a down payment
Although VA home loans make it a lot easier for borrowers to buy a home without paying a down payment, that’s not the case if the amount you borrow goes over the VA home loan limit. If you borrow more than the VA is willing to back, you can and should expect the lender to require a down payment.
Plan for 25% of the difference and set that aside for the down payment. For example, let’s say you are buying a home in a county that is not included in the list of the high cost of living areas above. The VA Loan limit would be $484,350. If you wanted to buy a home that was $650,000, you would need to come up with a downpayment that is 25% of the difference between the home price and the VA Loan Limit.
You would take $650,000 and subtract $484,350. This gives you $166,500. You would need to come up with a down payment of 25% of that amount, or $41,625.
You can substitute a the limit from the VA Loan Limit Chart above if you live in a higher cost of living area. For example, I live in Williamson County, TN, where the limit is $534,750. If I were to buy a house for the same amount of the previous example, I would need to come up with a downpayment of 25% of the difference between the house price and the higher limit.
So again, you would take the $650,000 and subtract $534,750. This gives you $115,250. Then multiply this by 25%. This gives us a downpayment requirement of $28,812.50.
The required downpayment may be lower, depending on the lender and your credit history, but you should have that much available just in case. If you find that you will not be able to afford the down payment for that particular house, you may want to look into either buying a different home or securing additional financing.
A down payment may decrease your interest rate
While paying a down payment may seem like a big hassle, it might actually work out in your favor. Often, if you make a down payment, your mortgage interest rate will decrease, which means you will pay significantly less in interest over time. Lenders like it when homebuyers make a downpayment, as it can decrease the risk profile.
VA Loans have no PMI requirement – even if you don’t make a downpayment
VA Loans do not have a Private Mortgage Insurance (PMI) requirement, which is often found for conventional mortgages when homebuyers make a downpayment less than 20% of the purchase price. This can save home buyers hundreds of dollars per month, and thousands of dollars per year.
VA Loan Limits Going Away in 2020
All of the above information is current for 2019. However, a recent bill, the Blue Water Navy Vietnam Veterans Act of 2019 (BWNVVA), removes VA Loan limits, starting on January 1, 2020.
As of that date, there will be no limit to the purchase price of a home that veterans can buy with a VA Loan, without making a downpayment. That said, lenders will still have the right to determine whether someone is qualified for the loan and under which terms.
This new law will allow eligible military members and veterans to purchase a home in a more expensive area without having to save thousands of dollars for a downpayment.
Part of the BWNVVA of 2019 also includes a temporary increase to VA Loan Funding Fees by 0.15-0.30% and exempts Purple Heart Recipients on active duty from paying the Funding Fee. Veterans with a VA service-connected disability rating are also exempt from paying the Funding Fee.
Speak with a VA Home Loan Specialist
We always recommend that when you are in doubt about something (especially something as important and complex as getting a home loan) that you get in contact with a specialist who can answer all your questions and help you navigate the system.
VA home loans are no exception. Reach out to a VA home loan specialist in your area or online to discuss your situation. They should be able to help you get answers to your specific situation and advise you on how to move forward in a way that will get you to your goal of buying your dream home.
A VA loan specialist can also help you understand how much home you can afford to buy, and explain the homebuying process.
It’s also a good idea to shop around for the best overall VA Loan. Be sure to compare several lenders to find the best deal. Pay attention to factors such as the interest rate, origination fees, closing costs, cost of points, and other factors. Comparing these will help you find the best VA loan for your situation.
The following lenders can help you start the process. It’s also a good idea to check with a local lender or two, as they can often meet or beat some national lenders. You can click on the map below to get started.
Here are some lenders to get started:
- Veterans United – Most Popular (they closed the most VA Loans in the U.S. in 2018).
- Quicken Loans – All Online Process – Easy to Use.
- NASB – Top 10 VA Lender – they do not charge an origination or application fee for VA loans.
- J.G. Wentworth – Great for refinancing a VA Loan.
Good luck in finding your dream home!