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VA Loan Limits

2014 VA Loan Limits

The U.S. Department of Veterans Affairs published its 2014 VA loan limits on December 20, 2013.

Individuals with VA home loan benefits may have noticed a slight increase in the loan limits in high-cost counties. The limits are based on the FHFA housing price report, which shows sales prices increased by an average 8.4% nationally.

In actuality, the VA Loan Guaranty Program does not really limit the loan amount for any eligible borrower. However, the VA puts out “limits” each year in order to specify the maximum loan amount for which the VA will guarantee. Typically, the VA will back up to 25% of each borrower’s loan up to the limit. Lenders can then determine the down payment requirement based on how much of the loan is backed by the federal government. Usually, a VA loan within loan limits will not require a down payment from a qualified borrower.

As expected, the limit of $417,000 remains the same for most of the country. That means the maximum guaranty amount for most loans is $104,250. This is known as the borrower’s entitlement. In other words, that is the amount of liability the VA is willing to accept, for a lender, should a borrower default.

Applicants with full entitlement may borrow up to the county limit with no money down. It is possible to borrow more than the published maximum if the borrower can make a cash down payment to secure the amount over the limit. Regardless of the VA loan limit in place, borrowers must qualify based upon credit and income for their specific loan.

Sometimes, VA-eligible borrowers only have partial entitlement because they have used their home loan benefits before. If they still own the home they purchased with their entitlement or have not restored their entitlement, the maximum guaranty amount is reduced for them, based on remaining entitlement.

In certain housing markets where homes are more expensive, the limit can exceed $417,000.

The 2014 VA county loan limits are effective beginning January 1 until further notice. To find out what the loan limits are in your neighborhood, to contact one of our loan professionals call 1-866-663-0826

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