What Is the Maximum VA Loan Limit?
Loans backed by the U.S. Department of Veterans Affairs (VA) have several benefits for U.S. veterans, service members, and surviving spouses, including competitive interest rates and no down payment requirement. And as of 2020, there are no VA loan limits if you’re borrowing for the first time. If you’ve already purchased a home with a VA loan, you may be subject to the same loan limits as conventional mortgages, which range from $806,500 to $1,209,750 for single-family homes, depending on your county.
If you’ve been wondering what the VA loan limit is, here’s a closer look at how VA loan limits work and when they come into play.
Key Points
• First-time borrowers with full entitlement have no VA loan limits, allowing borrowing any amount without a down payment.
• The VA guarantees 25% of loans over $144,000, providing security for lenders.
• Lenders may still have limits to the amount they are willing to lend to a borrower based on the applicant’s credit score and other factors.
• For borrowers without full entitlement, VA loan limits range from $806,500 to $1,209,750, varying by county.
• These limits apply if borrowers have an active VA loan, still own a home from a paid-off VA loan, or refinanced a VA loan.
What Are VA Home Loan Limits?
VA home loan limits refer to the maximum VA loan the Department of Veterans Affairs will guarantee. The guarantee from the VA means that it will pay a certain amount to your VA loan lender if you default on your loan.
If you have full entitlement, meaning you don’t have any other active VA loans, the VA will guarantee 25% of your home loan if it’s over $144,000. If your loan is less than $144,000, the VA will guarantee $36,000.
If you don’t have full entitlement, the VA will lower its guarantee amount by subtracting the amount of entitlement you’ve already used. In this case, you may have to make a down payment on the home that you buy with your VA loan.
What Are VA Loan Limits if You Have Full Entitlement?
So, what is the maximum VA loan limit if you have full entitlement? Since 2020, there has been no limit. You can take out as big a loan as you can qualify for with no down payment requirements. Your borrowing power will only be limited by the lender’s underwriting criteria, which includes thresholds for credit, income, and debt-to-income ratio.
The elimination of VA loan limits for borrowers with full entitlement gives many people more homebuying power without having to worry about a down payment or turn to a jumbo loan, which can have a stricter approval process.
You likely have full entitlement if you’re a first-time homebuyer. Alternatively, you may qualify if you borrowed a VA loan in the past but already paid it off in full after selling your property or having a foreclosure or short sale on your property.
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When Do VA Loan Limits Apply?
VA loan limits apply if you don’t have full entitlement. Here are some circumstances where you wouldn’t have full entitlement to this type of mortgage loan:
• You already have a VA loan and are still paying it back.
• You paid off a VA loan in full but still own the home you used it for.
• You refinanced your VA loan into a non-VA loan and still own the home.
• You had a short sale, deed in lieu of foreclosure, or foreclosure on a previous VA loan and didn’t pay the loan back in full.
If any of these scenarios apply, your VA loan limits would match the conforming home loan limits for your county. However, you may be able to borrow more than your county loan limit with a VA loan if you’re able to make a down payment.
VA Loan Limits by County
If you don’t have full entitlement, your VA loan limits often fall at $806,500. However, they can go up to $1,209,750 in areas with a high These limits are the same as the Federal Housing Finance Agency’s conforming loan limits and can be found on the U.S. Federal Housing website. The limits are adjusted each year and are higher for two-, three-, and four-unit homes.
If you need a bigger mortgage, you might consider a jumbo loan. High-income earners that make $250,000 to $500,000 per year tend to be the most suitable candidates for jumbo loans.
VA Loan Limits Example
If you don’t have full entitlement, VA loan limits will apply. To give an example, let’s say you’re looking to purchase a home in one of the more affordable places in the U.S. that has a loan limit of $806,500.
With full entitlement, the VA would guarantee up to 25% of that amount, or $201,625. If you’re already using $30,000 of your entitlement, the VA would subtract that amount and offer a guarantee of $171,625. Depending on the lender, you may be permitted to borrow a loan up to four times that amount, or $686,500. Borrowing a larger loan may be a possibility, but you’d have to make a down payment and pay closing costs.
If you are curious about how a VA loan stacks up against a conventional mortgage, you can go through the mortgage preapproval process to see what conventional loan amount and terms you might qualify for. You can also explore down payment assistance programs that could help you with a down payment if you don’t apply for the VA loan.
What VA Loan Limits Mean for You
If you’re buying your first home or have already paid off a previous VA loan in full, VA loan limits probably won’t affect you at all. Borrowers with full entitlement can take out a VA loan of any size without a down payment, as long as they can meet a lender’s financial criteria. You could potentially buy a high-cost home with a loan that exceeds traditional mortgage limits, as long as the monthly payments fall within your budget.
If you have an active VA loan or another reason why you don’t have full entitlement, VA loan limits will restrict how much you can borrow without making a down payment. Your limits will fall between $806,500 and $1,209,750, depending on your county. These limits are adjusted annually and may increase from year to year.
Understanding your VA loan limits is important because it impacts your homebuying power, as well as your down payment options. A major benefit of VA loans is their 0% down payment requirement, so make sure you’re clear on where your entitlement stands and any VA loan limits that apply based on your history of borrowing and the county where you want to purchase a home. Remember, too, that entitlement is not the same as eligibility. Your first step toward a VA loan is to obtain a Certificate of Eligibility from the VA.
The Takeaway
VA loan limits may be a non-issue if you’re borrowing for the first time. Instead of worrying about loan restrictions, you can turn your focus to determining your home-buying budget, finding a home, and choosing a lender. If you don’t have full entitlement, a VA lender can help you determine how much you can borrow and whether you might need to make a down payment.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Is there a maximum loan amount for VA loans?
There’s no maximum loan amount for VA loans for homebuyers with full entitlement who don’t have an active VA loan at the time of borrowing. However, lenders may limit how much you can borrow based on your credit, income, debt-to-income ratio, and other aspects of your finances.
Can I buy a million dollar home with a VA loan?
You can buy a million dollar home with a VA loan if you have full entitlement and strong enough finances to meet a lender’s approval. Borrowers without full entitlement will be subject to loan limits, which vary by county and range from $806,500 to $1,209,750.
How much do I need to make to buy a $400K house with a VA loan?
You would need a minimum income of roughly $115,000 and minimal other debts to be able to afford a $400,000 house with a VA loan. This assumes you have full entitlement and do not make any down payment. This estimate aligns with the 28/36 rule, which recommends spending no more than 28% of your gross monthly income on your mortgage payments and no more than 36% on your mortgage plus other debt payments. Don’t forget to take the cost of living into account as you crunch the numbers.
What is the jumbo limit for a VA loan?
There’s no jumbo limit for a VA loan if you have full entitlement — you can borrow as much as you need, subject to lender approval. In fact, the VA removed loan limits for borrowers with full entitlement in part to help them avoid jumbo loans, which can have high down payment requirements and strict standards for loan approval.
Can I have two VA loans at the same time?
You can have two VA loans at the same time, but you won’t have full entitlement. That means the VA will guarantee a lower amount of your loan (or nothing at all). In some cases, you may be required to make a down payment on your second VA loan.
How much income do I need for a $300K mortgage?
The income you’ll need for a $300k mortgage depends on several factors, including your average monthly expenses, down payment amount, interest rate, and repayment term. A general rule is to keep your mortgage payment below 28% of your gross monthly income (and your mortgage plus other debts below 36%).
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