Eligible veterans, surviving spouses and active-duty service members may qualify for a mortgage with no down payment requirement through a VA loan. As of 2020, according to the Department of Veterans Affairs, VA borrowers with full entitlement no longer have to worry about maximum loan limits, but the final decision on how much you can borrow is up to the lender.
What is the VA loan limit?
A VA loan limit is the loan cap that the Department of Veterans Affairs will guarantee without the borrower having to make a down payment. As of 2020, there is no VA loan limit if you have full entitlement. The VA guarantees up to 25% of the loan amount if the borrower defaults.
Congress approved VA home loans in 1944 to help veterans adjust to postwar life. The program was designed to assist veterans who, because of their service, had little opportunity to establish credit. Another purpose was to stimulate the U.S. economy after World War II. Originally, VA loans had a maximum guarantee of $2,000. A lot has changed since the launch of VA mortgages, including VA loan limits.
VA loan limits are now based on entitlement
Beginning in 2020, veterans with full entitlement have no VA loan limit. This means that borrowers aren't required to make a down payment with a loan amount over $144,000, and the Department of Veterans Affairs will pay up to 25% of the loan amount if a borrower defaults on their mortgage.
To qualify for full entitlement, you must have:
- Never have taken advantage of your VA loan benefit, or
- Completely paid off your VA loan and sold the property, or
- Used your VA loan benefit but had a foreclosure or short sale and fully repaid the loan
Just because a VA borrower has full entitlement, that doesn't necessarily mean they qualify for any loan amount. The borrower needs to provide a Certificate of Eligibility that proves to lenders that they have VA eligibility and entitlement. Additionally, you'll have to go through the qualification process with a lender to find out how much you can borrow. Lenders review your income, assets and credit history to determine how much they will lend in a VA loan.
When do VA loan limits apply?
VA loan limits apply to those without full entitlement — or those with remaining entitlement. You may have remaining entitlement if any of the following is true:
- You currently have a VA loan that you're repaying
- You completely paid off a previous VA mortgage but still own the home
- You previously refinanced out of a VA mortgage into a different mortgage and still own the home
- You had a short sale in the past and didn't pay back the VA loan in full
- You previously had a deed in lieu of foreclosure on a VA loan
- You previously had a foreclosure on a VA mortgage and didn’t pay back the VA loan in full
If you don’t have full entitlement, your VA loan limit is based on the county where the property is located. Here are a few examples of different loan limits for one-unit properties in counties with a strong military presence:
- Honolulu County in Hawaii: $822,375
- Bexar County in Texas: $548,250
- San Diego County in California: $753,250
To see the loan limits in your county, you can visit the Federal Housing Finance Agency website.
For borrowers refinancing their property through a VA streamline loan, also known as an interest rate reduction refinance loan (IRRRL), they are capped at their existing VA loan balance and any financed funding fee.
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page.
- Army Times, “VA loan history 101: From World War II to today's benefit.” Accessed April 19, 2021.
- Federal Housing Finance Agency (FHFA), “Conforming Loan Limits.” Accessed April 19, 2021.
- U.S. Department of Veterans Affairs (VA), “VA home loan limits.” Accessed April 19, 2021.
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