Are you wondering how much you can borrow with a VA loan? Whether you’re a first-time homebuyer, a seasoned investor, or a real estate professional, understanding VA loan limits is essential for planning your home purchase. The good news? VA loan limits have changed significantly in recent years, removing borrowing caps for many eligible veterans. However, several factors still impact how much you can finance.
In this article, we’ll break down the key elements that determine VA loan limits, provide numerical examples, and offer actionable insights to help you make informed decisions.
Understanding VA Loan Limits
VA loans are backed by the U.S. Department of Veterans Affairs (VA) and are designed to help veterans, active-duty service members, and eligible spouses buy homes with zero down payment and competitive interest rates. But how much can you borrow?
There are two main scenarios for VA loan limits:
- Full Entitlement (No Loan Limits): Eligible borrowers with full VA entitlement can secure a VA loan without a loan limit, meaning they can borrow as much as their lender approves based on their income and credit profile.
- Partial Entitlement (Loan Limits Apply): If a borrower has an existing VA loan or has defaulted on a previous VA loan, limits apply based on county conforming loan limits set by the Federal Housing Finance Agency (FHFA).
Key Factors That Affect Your VA Loan Limits
1. Your VA Loan Entitlement
Entitlement is the amount the VA guarantees to your lender if you default. It comes in two forms:
- Basic Entitlement: Typically $36,000, which covers loans up to $144,000.
- Bonus Entitlement (Secondary Entitlement): Covers loan amounts exceeding $144,000, often aligning with FHFA limits.
🔹 Example: If you have full entitlement, you don’t have a cap on how much you can borrow. However, if you have used a portion of your entitlement, your borrowing power is limited to the remaining available entitlement.
2. County Loan Limits
If you have partial entitlement, VA loan limits will be based on conforming loan limits set by the FHFA. These limits vary by county and change annually.
🔹 2024 Example:
- Standard counties: $766,550 limit (same as FHFA conforming loan limit)
- High-cost areas: Up to $1,149,825 in counties like Los Angeles, CA
📝 Tip: You can check FHFA’s loan limit lookup tool to see your county’s limit.
3. Your Credit and Income
Even if VA loan limits don’t apply to you, lender guidelines still determine how much you can borrow. Lenders assess:
- Credit Score: Most require 620+, though VA loans have no official minimum.
- Debt-to-Income Ratio (DTI): Ideally 41% or lower, though higher DTIs may be accepted with strong residual income.
- Employment and Income Stability: Steady employment history improves approval chances.
Lenders will analyze these factors to ensure you have the financial capability to repay the loan, even if there is no specific VA-imposed borrowing cap.
4. Down Payment Considerations
VA loans do not require a down payment for eligible borrowers with full entitlement. However, if you are exceeding county limits with partial entitlement, you may need a down payment.
🔹 Example: If your county limit is $766,550 and you wish to buy a $900,000 home, you may need to cover the difference (25% of the excess amount).
Calculation:
- $900,000 – $766,550 = $133,450 (amount exceeding limit)
- 25% of $133,450 = $33,362.50 (required down payment)
5. Previous VA Loan Usage
If you’ve used a VA loan before, your remaining entitlement affects how much you can borrow without a down payment.
🔹 Scenario: You have $200,000 left in entitlement, but want a $500,000 home. Since the VA guarantees 25%, you may need a down payment for the uncovered amount.
6. Jumbo VA Loans
If you’re borrowing above conforming loan limits, you may qualify for a Jumbo VA Loan. These loans still offer competitive rates but may require a higher credit score and a down payment.
🔹 Example:
- Borrowing $1,200,000 in a standard county
- County loan limit: $766,550
- Difference: $1,200,000 – $766,550 = $433,450
- 25% of $433,450 = $108,362.50 (down payment required)
While Jumbo VA loans are still beneficial compared to conventional jumbo loans, they come with stricter qualifications.
How to Maximize Your VA Loan Borrowing Power
✔️ Check Your Entitlement: Request a Certificate of Eligibility (COE) through VA.gov or your lender.
✔️ Monitor County Loan Limits: Know your area’s conforming loan limits to plan accordingly.
✔️ Improve Your Credit Score: A higher credit score can help secure better loan terms.
✔️ Lower Your Debt-to-Income Ratio: Paying off debts can increase borrowing capacity.
✔️ Work With a VA-Experienced Lender: Not all lenders specialize in VA loans—choose one that does.
✔️ Consider Refinancing If Needed: If you have an existing VA loan, refinancing may restore some entitlement and allow for a higher loan amount.
Conclusion: Plan Your VA Loan Strategy Wisely
VA loans offer incredible benefits, including zero down payments and flexible borrowing limits, but understanding entitlement, county loan limits, and lender requirements is key to maximizing your purchasing power.
If you’re ready to explore your VA loan options, use an online VA loan calculator or consult with a VA-approved lender to see how much you can borrow.
👉 Next Steps:
- Calculate Your VA Loan Eligibility
- Check Your County Loan Limits
- Find a VA-Approved Lender
With the right information, you can confidently move forward with your home-buying journey using the power of a VA loan! 🎖️🏡