VA loan limits no longer apply to qualified Veterans with their full VA loan entitlement. The limits do not capitalize on the amount you can borrow but set the maximum amount you can finance without any down payment.
A VA loan is a benefit available to Americans serving in the military. It is also known to veterans and unmarried spouses whose partners died while in the line of duty. Each year the VA updates the loan limits. However, these limits do not apply. This article reviews loan limits and situations where VA loan limits apply.
As of 2020, veterans, reservists, surviving spouses, and active duty members are not subject to any limit. Therefore, every qualified borrower with full entitlement can purchase a property that supersedes the conforming loan limit.
You will receive a full entitlement if you meet at least one of the following requirements:
- You are a new VA loan applicant
- You have paid a previous VA loan and sold the property
- You faced foreclosure but cleared the loan
Veterans with reduced VA loan entitlement must still follow VA loan limits. Keep in mind, VA loan limits are not a maximum on how much you can borrow but help determine how much you can borrow without needing to factor in a down payment
VA loan limits determine how much a Veteran with reduced entitlement can borrow before needing to factor in a down payment. VA loan limits vary by county and currently range from $766,550 to $1,149,825.
The table below breaks out VA loan limits by county. If you’re unsure of your county, use our calculator above and input a city or zip code.
Keep in mind, if you have full VA entitlement (the total amount of money paid willingly by the VA to the lender if you default on the payment terms), VA loan limits won’t apply. If you’re unsure if you have remaining entitlement, Bluecastle Lending is here to help. People who qualify for a VA loan should present a certificate of entitlement to the lender. Contact a home loan specialist today.
Florida VA Loan Limits by County
- Monroe: $929,200
- All other counties in Florida: $766,550
VA Loan Limit Example
Let’s assume you’re currently using $30,000 of your VA loan entitlement and want to purchase a new home in a standard cost county ($766,550 loan limit). Because the VA guarantees a quarter of the loan amount, the maximum entitlement in this county is currently $191,638.
Here’s how the typical VA loan limit calculations look:
- $191,638 – $30,000 in current entitlement = $161,638 remaining entitlement.
- $161,638 remaining entitlement x 4 = $646,552.
$646,552 represents how much you can borrow before needing a down payment.
In this example, you can purchase a home with $0 down up to $646,552. Anything above that mark would require a down payment equal to 25 percent of the difference between that ceiling and the purchase price. If you wanted to finance $700,000 instead of $642,552, you will need to put down 25 percent of $57,448, totaling $14,362
Requirements to Qualify for a VA loan
VA loans come with a few requirements that one should meet. However, VA loan requirements are more lenient than a conventional mortgage. These requirements include:
Certificate of Eligibility
The VA provides a Certificate of Eligibility as proof to show that you meet all the VA minimum requirements to qualify for a VA loan. To apply for the certificate, one must complete a DD214 form or a statement of service. Approved VA lenders such as Bluecastle Lending can help you apply for the CoE.
Debt-to-Income Ratio
The DTI ratio compares the total debts paid and the monthly gross income, expressed as a percentage. The VA does not limit the maximum DTI ratio for qualified members. However, people with a fixed loan rate can apply for a VA loan, and Bluecastle Lending has obtained approvals even with a high DTI of 68%.
Credit Score
Veteran Affairs does not set any minimum credit score standards. Most lenders can set their guidelines. At Bluecastle Lending, the minimum credit score is 620.
Occupancy Requirements
The property obtained through a VA loan should be your primary residence. One cannot use the home as a seasonal home, rental property, or vacation.
Property Requirements
- Primary Residence: The property must serve as your primary residence, not an investment property.
- VA Appraisal: A VA appraiser must assess the property to ensure it meets specific safety, security, and structural integrity standards.
Employment History
- Stable Employment: Lenders generally prefer a stable employment history, usually two years with the same employer or in the same line of work.
Income Verification
- Proof of Income: Provide proof of income through pay stubs, tax returns, and W-2s.
- Consistent Income: The income should be consistent and expected to continue.
Loan Limits
- Adherence to Loan Limits: Ensure that the loan amount you seek falls within the VA loan limits according to your entitlement for your area in Florida.
Additional Documentation
- Identification: A valid government-issued ID.
- Social Security Number: Required for all borrowers on the loan application.
- Additional Documents: Depending on the lender, other documentation may be necessary.
Lender Specific Requirements
- Lender Overlay: Some lenders may have additional ‘overlays’ or requirements beyond what the VA mandates.
Do You Qualify for a VA Home Loan?
VA home loans are loan offers available to military members and veterans. It allows them to purchase a new home regardless of their credit score. VA loans come with better interest rates, and applicants incur very little upfront costs, such as a down payment.
The Department of Veteran Affairs does not disburse money to applicants. It only regulates and approves the application process and provides applicants with a Certificate of Eligibility that lenders use for loan approval.
Therefore, once you secure the Certificate of Eligibility, visit Bluecastle Lending and apply for your VA loan. Bluecastle Lending is a VA-approved lender that offers VA loans to qualified military personnel at an affordable rate and flexible minimum requirements.