Are you considering a VA loan? Before starting your search for the perfect lender and home shopping, it’s worth knowing the loan limits so you’ll know what to expect when you apply. This guide dives into the specifics of VA loan limits, how to determine the caps in your local area and what to do if your home purchase needs exceed this amount.
What Are VA Loan Limits?
The VA loan limit is the maximum amount the Department of Veterans Affairs (VA) will guarantee for a mortgage. It also represents the largest loan amount the VA will back without requiring a down payment.
How VA Loan Limits Work
Preset loan limits vary by the county you live in. However, depending on your credit score, income and debt load, the lender could approve you for less than this figure.
VA Loan Limits for 2024
For 2024, the VA loan limit is $766,550 in most counties and up to $1,149,825 in high-cost areas. Again, this is the maximum amount you can borrow without needing a down payment.
It’s also important to note that borrowers with full entitlement aren’t subject to VA loan limits. They can borrow as much as the lender is willing to approve them without needing a down payment.
How are VA Loan Limits Calculated for 2024?
The Federal Housing Finance Agency (FHFA) sets loan limits annually for conforming loans that meet Fannie Mae and Freddie Mac guidelines. VA loans adopt the same thresholds.
Expected Changes in 2024
Again, borrowers with full entitlement are no longer subject to loan limits. The amount they can borrow for a mortgage is at the lender’s discretion. However, if you only have partial entitlement, the VA will guarantee up to 25% of the loan amount if it exceeds 25%.
Factors Influencing Changes
Market conditions and inflation heavily influence loan limits. As home prices rise, conforming loan and VA loan limits follow suit.
Regional Variations in VA Loan Limits
The VA loan limit you’re subject to depends on the county where you live.
High-Cost Areas
VA loan limits are significantly higher in more expensive markets to make homeownership more accessible. To illustrate, in Manhattan, New York and San Diego, California, it is capped at $1,149,825 and $1,006,250, respectively, to compensate for the steeper home prices.
Standard Cost Areas
Most counties nationwide are subject to the $766,550 conforming loan limit. This amount is typically sufficient in standard-cost areas.
Implications of VA Loan Limits
These preset limits impact borrowers looking to purchase a new home or refinance an existing mortgage.
Impact on Homebuyers
Again, the VA loan limit is $766,550 or up to $1,149,825 in more pricey markets. But if you have full entitlement, these loan limits do not apply, and you can borrow as much as the lender is willing to loan you for a home purchase without putting money down.
Impact on Refinancing
Refinancing could give you access to competitive rates, better terms and more affordable monthly mortgage payments without having to put money down. However, VA loan limits still apply to this transaction, and the new loan amount should not exceed the maximum threshold in your country.
VA Loan Limits 2024: Other Considerations
You’ll need to look beyond loan limits if you’re considering a VA loan to determine if it’s right for you.
Funding Fees
VA funding fees are mandatory for VA loans unless you meet certain criteria. You’ll pay between 1.25% and 3.3%, depending on the down payment amount (if applicable) and how many VA loans you’ve taken out. (Remember that this figure could be lower for VA-backed refinances).
You can typically roll the funding fee into the loan and repay it over the loan term instead if you choose not to pay it at closing.
Eligibility Requirements
Eligibility for VA loans depends on your service history and specific duty criteria.
Generally, veterans and active-duty service members qualify with at least 90 consecutive days of active service during wartime or 181 days of active service during peacetime. Reservists and National Guard members qualify with six years of service or if they meet other requirements.
Spouses of veterans who died in service or from a service-related disability might also be eligible.
To prove your eligibility, you must obtain a Certificate of Eligibility (COE). It is accessible through the eBenefits portal, by mail, or with the lender’s assistance.
Lenders also assess your creditworthiness, employment history, income and debt to make a decision.
How to Check Your Local VA Loan Limits
Here’s how to find the VA loan limit for your county.
Using VA Websites and Tools
You can use the Veterans United VA Loan Limit Calculator, which requires you to enter your state and county to find updated loan limits for 2024. These figures can also be found on the FHFA’s website.
Contacting VA Offices and Lenders
Reach out to the nearest VA office to inquire. Or consult with a VA-approved lender to find the VA loan limit for your county.
Strategies for Managing VA Loan Limits
Consider these strategies if you want to maximize your borrowing power with a VA loan.
Borrowing Above Limits
If the standard loan limit doesn’t quite work for you, ask the lender about a larger loan amount. They may be willing to accommodate you, especially if you have full entitlement remaining, but a down payment may be required for the amount you borrow that exceeds the VA loan limit.
Using Jumbo VA Loans
Jumbo VA loans are designed to accommodate borrowers looking to borrow beyond the standard VA loan limits. Depending on your financial profile and the lender, you may be eligible for a loan with competitive terms and no down payment requirement.
Conclusion: Recap of Key Points for VA Loan Limits 2024
In 2024, VA loan limits vary by region. Standard loan limits in most parts of the country are $766,550. In high-cost areas, these limits can go up to $1,149,825. You don’t have a home loan limit if you have full entitlement. You won’t need to make a down payment for loans over $144,000.
When applying for a VA loan, lenders will consider your complete financial picture, including your credit score, debt, income and assets. This information determines how much they will lend you for a home purchase or refinance.
