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VA Loan Basics: What is the VA Loan Limit?

Yes, there is a VA loan limit. But there isn’t a maximum VA loan amount.

Bewildered? Join the ranks of service members and real estate agents who are baffled by the mysteries of “VA loan limits.” Let’s wade through the confusion with a clear and simple explanation.

What is the VA Loan Limit?

First off, understand that the term “VA loan limit” is a bit of a misnomer. The Department of Veterans Affairs doesn’t actually cap VA loans at a certain amount. Veterans with their full VA loan entitlement can borrow as much as a lender is willing to lend.

Instead, the VA loan limits help determine how much a veteran without their full VA loan entitlement can purchase before having to make a down payment. The loan limit represents the cap on the amount the VA will guaranty. The VA guaranty is typically equal to 25 percent of the loan amount.

Veterans without their full entitlement -- either because they have one or more active VA loans or have lost a previous one to foreclosure -- will have to contend with these county-level limits.

How are VA Loan Limits Established?

VA loan limits are up for review at the end of each calendar year. Limits are set by county of purchase, and are based on area housing costs. They are the same as the one-unit conforming loan limit used by Fannie Mae and Freddie Mac.

You can use this calculator to check out the VA loan limits for your county.

How Lenders Utilize VA Loan Limits

Veterans without their full VA loan entitlement may need to make a down payment in order to purchase. Lenders assess the veteran's remaining entitlement by reviewing their Certificate of Eligibility and learning more about where they plan to purchase. Entitlement in these situations is based in part on the loan limit for the county in which you're buying.

Lenders will then be able to calculate a zero-down ceiling, the point above which the veteran needs to put money down. The good news is buyers in these scenarios need only put down 25 percent of the difference between the purchase price and where their VA loan entitlement caps out.

Talk with a Veterans United loan specialist to learn more about your specific purchasing situation and what might be possible.

High-Cost Counties Have Higher Limits

The current default VA loan limit is $548,250. But the VA sets higher loan limits for more expensive parts of the country.

The high-cost county limits currently top out at $822,375.

VA Loan Limits Set Through End of 2020

The VA loan limits expire on December 31 of each year. Prior to that date, the VA will conduct a review and issue VA loan limits for the following year. Be sure that you always have the most recent VA loan limits for your market, you never know if they will fluctuate from one year to another.

If you'd like additional information on the VA mortgage process check out this helpful guide.