Understanding VA Loan Limits in 2021

Are you preparing for the mission of homeownership? While there are many perks to homeownership, getting there with a VA loan provides even more perks. A VA loan is a mortgage loan for service members that’s guaranteed by the U.S. Department of Veterans Affairs (VA). Its main purpose is to help Veterans finance a home purchase with favorable loan terms.

VA loans allow qualified veterans, active-duty personnel, National Guard, and surviving spouses to buy homes with 0% down.

What is the VA Loan limit?

Before we jump into the details, let’s clear up a bit of confusion on “VA loan limits.” The Department of Veterans Affairs doesn’t actually cap VA Loans at a certain amount.

VA Loan limits are there to help determine how much someone without their full entitlement can borrow without making a down payment. You likely won’t have full entitlement if you have another active VA Loan or have lost one due to a foreclosure.

Loan limits vary by county and are based on area housing costs. If you're trying to figure out what your loan limits are, our Mortgage Bankers can easily help you determine that.

Do you have full entitlement?

Full entitlement means you don’t have an active VA loan and you’re able to use your full benefits when applying for a loan. For example, you can have full entitlement if you’ve never used your loan benefit before, if you’ve paid off a VA Loan, or if you sold your house that had VA Loan.

The military provides you with the Certificate of Eligibility (COE), so when you have an amount left it will state how much entitlement you have.

Historically, the VA limited the guaranty amount, but a new rule went into effect in 2020 that has eliminated those limits when you have full VA home loan entitlement.

What are VA home loan limits for those with “remaining entitlement?”

If you have remaining entitlement, your COE will state that you have more than $0 but less than $36,000. Finding yourself in this bracket means loan limits might apply when you’re obtaining at VA loan. Loan limits often apply when you’re looking to obtain a VA loan using your remaining entitlement. At that point, VA loan limits are based on county loan limits from the Federal Housing Finance Agency.

Remember that these limits don’t cap how much you can borrow, let’s say you’ve found the home of your dreams but it’s outside of the limits. If you can afford it, you just need to make sure you can pay the down payment at that point. That number will be calculated by your entitlement and the price of your home.

What are current loan limits?

VA loan limits are determined at the end of each year, which means they often change year to year. As of 2021, in most cases the current loan limits range from $548,250 to $822,375.

Understanding a VA Loan is important before you obtain one. Going into the buying process is an exciting time and undoubtably you’re going to navigate through new waters. Doing your research up front is a great start!

And whether you have full entitlement or remaining entitlement, it doesn’t hurt to get with one of our Mortgage Bankers for more information on the VA loan and what might be possible for you!