91�ƽ��

‍VA loans give eligible homebuyers an advantage over conventional loan programs because, as of 2020, VA loans have no limits for those with full entitlement. That’s extremely valuable if you ��Dz�’t have a lot of cash for a down payment and want to live in a more expensive part of the country.

If you ��Dz�’t have full entitlement — which is not the case for most VA loan applicants — you are subject to strict limits on loan amounts, depending on the county you’re looking to buy.

What is the maximum I can borrow on a VA loan?

VA loan limits depend on how much entitlement you have and your lender.

Since 2020, veterans, active-duty service members, and surviving spouses with full entitlement have not been subject to any government-enforced loan limit. Theoretically, then, there’s no maximum to how much you can borrow with a VA loan.��

In practice, however, that’s not always the case. You’re still limited to the maximum amount a bank will actually loan you, which depends on myriad factors, including your income, credit score, debt-to-income ratio (DTI), and more.

Entitlement is the dollar amount the VA will repay a lender if you default. Most VA applicants have full entitlement, which you have if meet one of the following criteria:

• You’re eligible for a VA home loan benefits, but have never used them.
• You’ve paid off a prior VA loan and sold the property it was attached to.
• You had a foreclosure on a prior VA loan but paid it in full.

→ Learn how to calculate VA entitlement

Will VA loan limits increase?

If you ��Dz�’t meet full entitlement, then you are subject to conforming loan limits set by the Federal Housing Finance Agency (FHFA), which are typically adjusted every year. The limits will increase by 5.56% in 2024.��

For the majority of the U.S. the 2023 maximum conforming loan limit for one-unit properties is $726,200. In more expensive parts of the country, the limit is $1,089,300 for one-unit homes in 2023. This will go up to $1,149,825 in 2024. If you get a bigger loan amount, then you’re looking at a jumbo mortgage.

While these new loan limits are effective immediately, loans using the new limit must close on or after January 1, 2024.

When do VA loan limits apply?

We’ve touched on what full entitlement means, but with what’s called impacted entitlement, you’re subject to VA loan limits. These limits, listed above, depend on the county you’re looking to buy in and whether you’re making a down payment or not. VA-approved lenders may also restrict how much you can borrow if:

• You’re still paying back another VA loan or other home loan.
• You paid off a previous VA, loan but haven’t restored your entitlement. Provide your lender with proof the VA loan was paid in full to resolve this issue.
• You refinanced your VA loan into a non-VA loan. You may still be able to restore entitlement but you’ll need to show your refinance closing paperwork to your lender.
• You sold your home as part of a short sale or deed in lieu of foreclosure.
• You had a foreclosure or a previous VA loan that has yet to be paid in full.
• You’re looking to borrow a larger loan amount that feels too risky to lenders.

Why loan limits matter for VA loans

If you’re a first-time user of the VA loan program, you shouldn’t have anything to worry about when it comes to limits. You can focus on finding the right house for you and figuring out how much you can afford for a down payment, if you’d like.

But if you are subject to conforming loan limits, it’s important to try to keep your mortgage amount below that number. Otherwise, the loans will qualify as jumbo loans, which may have higher interest rates and require private mortgage insurance (PMI). That translates to more expensive monthly payments and may become a financial burden.

You can use a mortgage calculator to estimate your future monthly payments.

What to do if you need a bigger loan amount

If you have impacted entitlement or you can’t get approved for a high enough loan amount, it’s time to explore other options. Fortunately, there’s a lot you can do.

1. Find a less expensive home: The simplest option? Look for a home that’s more in your budget. Not only will it be easier to get approved for a loan, but it will have less of an impact on your financial situation every month.
2. Shop other lenders: While one lender might not approve you for a jumbo loan that goes over conforming loan limits, another might. Shop around if you’re really smitten with a home.
3. Earn some more: A down payment is one of the most impactful tools that homebuyers have, both to help them get approved for a loan and to lower interest rates and monthly payments. Before stretching to buy a home, take some time to start a side hustle and earn a little more money to pay down debts, improve your credit score, and raise more cash for your VA down payment, even when it’s not required.
4. Explore other loan and grant programs: There are myriad federal, state, and local programs designed to help first-time homebuyers. See if what’s available to you makes it easier to get your loan, or if you might find more success by pursuing an FHA loan or conventional loan.

For most people eligible for the VA loan program, loan limits are not an issue. Full entitlement gives you a lot of flexibility when searching for a home. However, impacted entitlement subjects you to conforming loan limits which, although higher in 2023, may make it more difficult to purchase the home of your dreams.