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How VA Home Loan Limits Work

For eligible veterans, the VA home loan can be a great way to purchase a home with little or no money down.   The VA guarantees a portion of the loan, and the lender then is secured enough to be able to finance the entire purchase price.  Of course, the home must pass inspections and the appraisal must verify a value that will make the deal work.

For 2011, the maximum loan amount is $417,000 for most of the country.  The VA will guarantee 25% of this amount for a veteran with full eligibility.  There are exceptions to the high side for expensive areas.  There is a list of those areas at the site, for counties in AK, CA, CO, FL, GU, HI, ID, MA, MD, MP, NC, NH, NJ, NY, PA, UT, VA, VI, WA, WV and WY.  These expensive areas are allowed higher loan limits due to real estate prices that would make a VA loan unusable without an increase in the limits.  In fact, in some of these areas, loans of over $1 million can qualify.

Home buyers in price ranges over the $417,000 limit often ignore their VA loan eligibility, thinking that it will not apply to a larger purchase.  This isn't true unless they are wanting a zero down payment loan.  Higher priced homes require a tedious calculation to determine the amount of the down payment the buyer will need, but an experienced loan officer can do this calculation for you.

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