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Loan Limit Lingo: There's Actually No Maximum Amount on a VA Loan

VA loan limits act more as a guide more than a restriction on the amount of money you can borrow. Read below to get a better understanding on how VA loan limits work.

There isn't a maximum loan amount on a VA loan. It's more a question of how much you can borrow without a down payment.

The concept of the VA's loan limits can be confusing not just for military homebuyers but even for people in and around the mortgage industry. You're likely to find a lot of misconceptions and bad information out there online.

If you're confused about the VA loan process, Veterans United can help steer you through the process!

VA Loans Above the Limit

One of the most common misconceptions is that the VA loan limits represent the absolute maximum amount of money you can borrow using this long-cherished home loan benefit. The fact is there's actually no maximum loan amount on a VA loan, meaning you can borrow above the VA loan limit.

Let's take a closer look.

VA Loan Limits

The VA program was created to help level the playing field and get veterans and military members into homes, considering it can be difficult for those who serve to meet the requirements for other mortgage products. The biggest single benefit of this program is that qualified borrowers can purchase without having to put money down. That's a tremendous financial advantage.

The VA's loan limits help determine how much veterans without their full VA loan entitlement can borrow before needing to make a down payment. Veterans with their full entitlement can borrow as much as a lender is willing to lend them, all without putting money down.

The limits come into play when veterans have less than their full entitlement, either because of active VA loan(s) or a previous default.

These limits help lenders assess a veteran's zero-down buying power. They can change every year, and the limits are higher in more expensive housing markets.

Loan Limits & Down Payment

Veterans with less than their full entitlement might not need a down payment at all to purchase again using their VA loan benefit. Every situation is different.

If you want to buy above where your entitlement caps out, then you will need to put down a quarter of the difference between that figure and the purchase price. For example, if your remaining entitlement caps out at $250,000 and you want to buy a $350,000 home, you will need a $25,000 down payment.

It's important to know that your VA loan benefits can help you purchase an expensive home. Obviously you need to be able to afford the mortgage and associated costs. The program is definitely worth a long, hard look if you're also considering other financing types on a "jumbo" loan, as they're called. You can talk with a Veterans United loan specialist about what might be possible at 855-870-8845.

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