VA loans allow qualified veterans, active duty personnel, and surviving spouses to buy homes without a down payment. The Department of Veterans Affairs does not limit how much you may borrow for your home loan. In the past, however, the VA limited its loan guaranty amount, which effectively limited the mortgage loan amount you could get if you made a 0% down payment on your VA loan. New rules in 2020 have eliminated the guaranty amount limits when you have your full VA home loan entitlement!
VA home loan limits starting in 2020
Veterans who have full entitlement can now get approved for a VA loan with no down payment and no maximum home price. Lenders may still limit the mortgage amounts they offer you based on your income, finances, credit score, and other factors however. The new VA loan limit rules do not guarantee you will be approved for a larger mortgage. They just remove the old guaranty limits for full VA home loan entitlements.
What does "full entitlement" to a VA Loan mean?
Full entitlement means you do not have an active VA loan and can use your full benefits when applying for a mortgage. You can have full entitlement if you’ve never used your loan benefit before, if you’ve paid off a previous VA loan and sold the house, or you’ve repaid the VA in full after a foreclosure or short sale.
When you have your full entitlement, your Certificate of Eligibility (COE) will say "This Veteran’s basic entitlement is $36,000." When you have used your full entitlement, your COE will say "This Veteran’s basic entitlement is $0."
What are VA home loan limits for "remaining entitlement"?
In some cases, you may have a "remaining entitlement" you can use on a second VA loan. These cases can include having an active VA loan you are still paying back or having fully paid off a previous VA loan for a home you still own. When you have your remaining entitlement, your Certificate of Eligibility (COE) will say your basic entitlement is more than $0 but less than $36,000.
Loan limits often apply when you would like to get a VA loan using your remaining entitlement. These VA home loan limits are based on county loan limits published by the Federal Housing Finance Agency. You may also need to make a down payment when you are buying a home with your remaining entitlement. See the VA website for more information.
What are maximum loan amounts for IRRRL refinances?
When you are using a VA IRRRL to refinance your home, you are limited to your existing VA loan balance plus fees which can be rolled into your new loan amount. These can include up to two discount points and the VA funding fee, which for IRRRL refinances is currently set at 0.5%.
Ask Freedom Mortgage about VA loans
Freedom Mortgage is the #1 VA lender1 in the United States. We are dedicated to helping veterans buy and refinance homes with VA loans. Talk to our experienced Loan Advisors today by calling
877-220-5533 or Get Started online.
1. Inside Mortgage Finance, 1Q2020