Most veterans will not notice any real change in their 2013 VA loan limits. The VA’s establishment of 2013 loan limits reported a modest increase in median home prices. The report also showed that across the U.S., some loan limits increased, some decreased, and many stayed the same. The majority of U.S. counties will remain at $417,000 veterans loan amount.
How is the VA loan limit figured?
The VA primary entitlement is $36,000. The VA pledges to repay up to a quarter of the loan amount, which is a financial guarantee. You can quickly calculate $36,000 x 4 = $144,000, which would appear to be the maximum loan amount for most borrowers.
But wait! To stay competitive and ensure veterans have access to home ownership, the VA started to link its guarantee amounts with the conforming loan limit for conventional financing, which is $417,000. The VA’s general policy is to cover a quarter of the loan amount. A quarter of $417,000 is $104,250. To meet that figure, the VA essentially created a secondary entitlement amount ($104,250 – 36,000 = $68,250).
That second entitlement layer comes into play whenever a veteran purchases a home for more than $144,000.
For Some Counties 2013 Loan Limits are Lower
Certain counties have lower loan limits from 2012 to 2013. This table shows the states and counties where 2013 VA loan limits are smaller compared to 2012: Data is displayed in alphabetical order by state and then by county within that state:
|California||Alameda, Contra Costa, Los Angeles, Marin, Monterey, Orange, San Benito, San Diego, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Sonoma and Ventura|
|Colorado||Eagle, Lake, Routt and Summit|
|District of Columbia|
|Idaho||Blaine and Teton|
|Massachusetts||Bristol and Dukes|
|Maryland||Anne Arundel, Baltimore, Baltimore City, Carroll, Harford and Howard|
|New Jersey||Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex and Union|
|New York||Bronx, Kings, Nassau, New York, Putman, Queens, Richmond, Rockland, Suffolk, Westchester|
Veterans mortgage loan limits apply to loans closed January 1, 2013, through December 31, 2013.VA loan limits are based on county median home values estimated by the FHA.
To be clear: the VA loan limit DOES NOT limit the amount a veteran can borrow using the veteran mortgage loan program. The VA loan limit shows the maximum amount for which the government will provide its guarantee. Loans over the specified limits will likely require a down payment to secure the overage.
Most lenders require that a combination of the guarantee entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less. To keep it simple then, if you have $25,000 remaining entitlement you would probably meet a lender’s minimum guarantee requirement for a no-down payment loan to buy a property valued at and selling for $100,000. And don’t forget, you can also combine a down payment with the remaining entitlement for a larger loan amount.
You can direct your questions about VA loans in a particular county to the VA Regional Loan Center listed for that county.