The VA home loan program is a program administered through the federal government. However, the government is not tasked with directly making the loans to service members. Instead, private lenders such as the Veterans United Home Loans do the financing of the home loan while the VA acts as a guarantor, protecting private lenders against losses in the case of defaults on the part of the buyers.
The 2018 VA loan limit increased 6.8% to result in a total of $453,100 maximum limit from last years $424,100 max limit. The $453,000 maximum is a standard that exists for nearly all locations across the United States.However, not every location is covered by the VA home loan program.
States with Max VA Loan Exceptions
There are some states with high-cost counties where VA home loan program maximum amounts may differ from the standard of $435,100. It’s important to note that the VA loan program is not responsible for imposing the maximum amount a borrower can obtain.
Instead, the VA merely limits its liability by capping the amount at the standard $435,100. Through this standardized amount, banks will lend the money to borrowers without the cumbersome requirement of a down payment.
However, those borrowers who live in one of the 220 high-cost counties in various states will clearly require an increased maximum amount to purchase a home. For example, a veteran who resides in New York City will not be able to procure a decent home with $435,100 and will more than likely only be able to afford the most dilapidated and least desirable of properties.
In cases where borrowers need an increased maximum loan amount, lenders may decide to give increased loan amounts but will often require a down payment, which can be a significant amount of money. The down payment is typically based on the median home values in the county as reported by the FHA.
Listed below is a chart of the states that have high-cost counties that are well over the standard base maximum of $435,100 and may affect a borrower's loan terms and conditions, such as the need for a significant down payment.
Important to remember is that any location in the United States not appearing on this list has a max VA loan amount of $435,000
Chart of States with VA Loan Covered High-Cost Counties
|State||2018 VA Loan Limit Max Amount|
|District of Columbia||$679,650|
NOTE: For all counties not listed below, the limit is $453,100.
Max VA Home Loan Amounts: Other Factors
- 2018 VA Loan limits apply to all loans processed and closed from January 1, 2018 through December 31, 2018
- Compelling circumstances may help borrowers purchase homes in higher cost locales, even if that locale exceeds the base maximum amount by a significant amount
- The newly increased VA home loan limits were put in place with the intent of enabling borrowers in costlier loan markets to borrow more money while not being required to put any money down
- It is important to be aware of the various factors that can affect your interest rate, including your credit score, debt-to-income ratio, the duration of your loan, and the current market conditions
- VA funding fees are directly given to the VA for the purposes of successfully helping military home buyers in the present and in the future and to ensure there are no unnecessary tax burdens on veterans.
- The fee is dependent on the circumstances of the borrower and has no relation to veterans who have service-connected disabilities. An example would be a first-time borrower who pays 2.15 percent of the home’s purchase price but when using the VA home loan program again in the future, pays 3.4%.
- Funding fees can be incorporated into the overall loan amount
Helpful Links and Additional Information
Visit this link to get more information on VA home loan limits by county
- To find out more about VA home loan mortgage rates you can go here
- Visit Veterans United for a wealth of additional information for all branches of the military
- Take advantage of the online Veterans United Home Loans' Funding Fee Calculatorto get a better idea of your situation
- Peruse this link to see how VA home loan terms and conditions compared to traditional mortgages
- Call 1-855-258-3548 to speak to a loan specialist who can help you determine the VA home loan maximum limit in your specific area
- Click here to find out more about VA Loan eligibility
The VA home loan was a program created in 1944 by the U.S. government to assist members of the military in procuring homes easily without excessive down payments or having excellent credit scores. Since its inception, the VA home loan program has assisted more than 22 million active duty members of the military and veterans purchase or refinance their homes.
Today in 2018, the VA home loan mortgage is more important than it has ever been. In recent years, the housing market as a collective whole has undergone a series of critical issues and culminated in a complete collapse, where millions of homeowners experienced a significant loss of value on their homes, and in extreme cases, many lost their homes and became homeless.
Since the housing bust, lenders have become exceptionally stringent with their rules and regulations. Selectivity in lending has become a new standard; a far cry from the free-for-all lending practices of years past. Lending requirements have essentially transformed in the wake of the collapsed housing market, resulting in millions of prospective home buyers experiencing an inability to borrow the funds for a home.
In stark contrast, the VA home loan program has remained steady and secure, with increases in loan amounts to further assist service members. Without this program, countless veterans and members of the military would face the same difficulties as their civilian counterparts dealing with strict standards in terms of credit, down payment, and more.
A veritable lifeline for members of the military and its veterans, the VA home loan program is an amazing resource that will go on to assist millions of members of all of the service branches for years to come.