A new law will eliminate VA loan limits next year, but the current limits still affect how much you can borrow in 2019 without making a down payment.
Here’s a little basic training on VA loan limits.
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What are VA loan limits?
VA loan limits are the highest-value loans the Department of Veterans Affairs is allowed to guarantee without your making a down payment. They match the limits set by the Federal Housing Finance Agency on conforming loans and do not cap the amount you can borrow.
VA loan limits do not put a cap on how much eligible borrowers can finance.”
For a single-family residence in a typical U.S. county, the limit in 2019 is $484,350. That’s the maximum a VA loan borrower can finance for no money down in those counties.
Higher limits are established in high-cost counties, such as Honolulu, New York and San Francisco counties, where the one-unit residential limit in 2019 is $726,525.
No VA loan limits starting in 2020
A new law will eliminate VA loan limits next year. That change — along with higher VA loan fees — is coming by way of the Blue Water Navy Vietnam Veterans Act. Besides removing VA loan limits and changing VA loan fees, the legislation will provide disability benefits for Navy veterans exposed to Agent Orange during the Vietnam War. The law states the VA loan changes will go into effect Jan. 1, 2020.
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2019 VA county loan limits
See the VA loan limit in your county.
VA loan limits don’t restrict how much you can borrow
Pending the changes coming in 2020, the 2019 loan limits apply. If you’ve found a property you really love — and can afford — and it’s over the county’s loan limit, you can still get a VA loan. It’s just a matter of coming up with a down payment.
The VA requires an eligible borrower to put down 25% of the difference between the purchase price and the local loan limit. Here’s an example:
Assuming the typical county limit of $484,350 And a home’s purchase price of $550,000 Results in a difference of $65,650 $65,650 x 25% = $16,412.50 down payment required