The loan limit isn’t a cap on purchase price. Instead it is a cap on how much a buyer can purchase without making a down payment using their VA loan benefits. And in high cost counties, this number is even higher. For example, San Diego, California has a 2017 VA loan limit set at $649,750. You can calculate the loan limit in your county with this great calculator.
It is possible for a buyer to purchase a home over the county loan limit using their VA loan benefits. To do so, the buyer would just need to put down 25 percent of the difference between the purchase price and loan limit. Here’s an example:
Purchase price: $550,000
VA loan limit: $453,100
Difference: $96,900
25 percent of difference: $24,225
So in this example, the buyer would need to put down $24,225 to purchase the home using their VA loan benefits. As a reminder, VA loans don’t require mortgage insurance. To purchase the same house with a conventional loan and not pay mortgage insurance, the buyer would have to put down 20 percent, equalling $110,000 for the above example.
As you can see, the VA home loan is an amazing benefit to our service members, veterans and their families.
Check now to see if your county loan limits increased this year!
Thank you for your continued dedication to serving those who’ve served!