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VA Loan Lending Limits

By: Grant Moon 10/13/12 04:22 pm

VA Loan Lending Limits

 

The Department of Veteran’s Affairs mortgage program, or simply the VA loan program, is designed to assist veterans and other qualified service members obtain financing in order to buy a home. The VA sets out its own approval guidelines which lenders must follow in order to be eligible for the VA guarantee that helps support the VA loan program.  These limits can range from the amounts and types of closing costs a veteran may encounter to the types of property a borrower can use VA financing for.

The VA also places limits on the potential guarantee on a VA mortgage loan. This guarantee to a lender is limited to 25 percent of the issued mortgage yet. This limitation can vary based upon the location of the property and can be higher or lower depending on the relative values of real estate again based upon the geography.  The vast majority of VA lenders will cap a VA Loan amount at $417,000 with the VA guarantee being 25 percent of that amount, based upon a veteran’s current entitlement.

Yet in other areas considered “high cost” these limits will be higher and is delineated by the county in which the property is located.  For example, real estate in Alaska is considered as one of these high cost areas and both conventional as well as government lenders place loans above the $417,000 mark.  In Aleutians East County for example the VA loan limit is $625,500 as is the limit in Juneau County.

If you drop back down to the continental United States into California, the maximum VA limit in San Diego County is $477,000 and $460,000 in Napa County.  There aren’t many higher cost counties in the United States compared to the number of counties and parishes in existence overall but the VA does recognize the higher cost status when it comes to determining the maximum VA loan amount for all VA lenders.

The below states have counties that exceed the normal $417,000 limit:

Alaska Maryland
California New Hampshire
Colorado New Jersey
Connecticut New York
District of Columbia(DC) Pennsylvania
Guam Utah
Hawaii Virginia
Idaho Washington
Massachusetts Wyoming

 

Remember,  you may be eligible for a higher limit because your property is in a high cost county doesn’t mean that you should look to maximize the threshold. Good home buying starts with a having a good understanding of what you can afford.

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