Understanding VA Home Loan Limits

If you’re a veteran, service member, or a surviving spouse, and you’re thinking about using a VA-backed home loan, you might be wondering about loan limits and how much you can borrow without a down payment. Here’s what you need to know.

No Loan Limits with Full Entitlement

As of 2020, if you have full entitlement, there are no limits on the size of your VA loan over $144,000. This means you can borrow as much as your lender will approve without needing a down payment. If something goes wrong and you default, the VA guarantees up to 25% of the loan amount to your lender.

You have full entitlement if any of these apply to you:

• You’ve never used your home loan benefit.
• You paid off a previous VA loan and sold the property, restoring your full entitlement.
• You had a foreclosure or short sale on a VA loan but have since repaid the VA in full.

What About Remaining Entitlement?

If you’ve used some of your entitlement, you may still have some left to use for another VA loan. In this case, your loan limit is tied to the county limit where you live. If you default, the VA will cover up to 25% of the county limit minus what you’ve already used.

You might have remaining entitlement if:

• You’re still paying off a current VA loan.
• You paid off a previous VA loan but kept the home.
• You refinanced your VA loan into a non-VA loan.
• You had a short sale or foreclosure on a VA loan and haven’t fully repaid the VA.

Borrowing Over County Limits

When using remaining entitlement, if your loan is over $144,000, you may need to make a down payment. Lenders typically want at least 25% coverage of the loan amount through your entitlement and/or a down payment.

To borrow more than the county loan limit, you’ll need to qualify with your lender, who will assess your credit, income, and assets. Although the VA doesn’t require a minimum credit score, lenders might have their own requirements.

Checking Your COE

Your Certificate of Eligibility (COE) shows how much entitlement you’ve used. If it states “This Veteran’s basic entitlement is $0,” it means you’ve used your home loan benefit before and don’t have remaining entitlement. However, if you sell your property and pay off your VA-backed loan, your entitlement can be restored.

County Loan Limits

VA loan limits match the Federal Housing Finance Agency (FHFA) limits. You can find the current limits for your area on the FHFA website.