The U.S. Department of Veterans Affairs (VA) backed home mortgage loans are the highest-value loans the VA guarantees for servicemen and women without needing to pay a down payment. These loans are great options for people who have served the country or are the qualified family members of those who have served. The benefit has also just gotten a lot better. As of 2020, the VA eliminated loan limits for those that have full entitlement and haven’t used this benefit yet.
Those who want to use a VA-backed home loan for a second home or have defaulted on a VA-backed home loan before are still covered by a loan limit. This limit, however, does not dictate how much you can borrow but how much you can finance without paying for a down payment. These limits change each year to adjust to the current housing market conditions. Depending on which county you live in, the limit will be slightly different. These limits match those set by the Federal Housing Finance Agency (FHFA) for conforming loans.
According to an American Eagle Mortgage article, the 2021 loan limit in most states is $548,250 for single-family homes. However, as stated previously, this number may differ in some counties. For example, in more expensive areas like San Francisco or New York, the limit is as high as $822,375. This limit means that you can borrow up to $822,375 that the government will back without you having to fund a down payment or pay for expensive private mortgage insurance. Whether you are looking to move up from a starter home or invest in a second property, a VA-backed home loan can be a useful tool to avoid paying for a large down payment, if not none at all. If you want to know if a VA-backed home loan is right for you, make sure to check out our other blog posts or talk with one of our Loan Advisors.