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What is the Most You Can Borrow with a VA Loan?
Four Minute Read
Written by Ed Andrews III on July 29th, 2020
The maximum loan amount for a VA loan is a skillion dollars….no seriously. There’s no maximum loan amount on VA loans. Well...at least not most of the time. Keep reading and I’ll give you all the details.

So here’s the deal. As long as you have full entitlement, there is no limit on the price of the home you can buy with VA financing. If you don’t have full entitlement it’s because you’ve already used the VA loan and haven’t restored your entitlement.

This could be because you currently have a home financed with a VA mortgage. It could be because you had a home financed with VA and paid the loan off or refinanced (with a non-VA loan), but you still own the property. It could be because you had a VA loan foreclosed on and you never repaid the VA for what they paid to the mortgage company to honor the VA loan guaranty. Either of these circumstances will prevent you from having full entitlement.

In either event there’s still not a maximum amount of home you can buy. Rather, there’s a maximum amount of home you can buy without having to make a down payment. So if you don’t have full entitlement how do you determine how much you have to put down. In order to figure that out you’ll first need to know these five things: 

1. How much entitlement are you using?

This can be determined by calculating 25% of the amount of money you initially borrowed with your previous VA loan. For example if you borrowed $250,000 you would have used $62,500 of your entitlement ($250,000 x .25 = $62,500)

2. What is the maximum entitlement a veteran can have in the area you want to buy a home?

To figure this out you’ll need to know the conforming loan limit in that area. This tends to increase each year. Here's a link to help you find this information. https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx

As of 2021 that amount is $548,250 in most areas. Once you have the conforming loan limit in that area, calculate 25% of that amount. So if the loan limit is $548,250 the maximum possible entitlement would be $137,062.50 ($548,250 x .25 = $137,062.50)

3. How much entitlement do you have left?

Subtract how much you’re using from the maximum. So in this example $137,062.50 - $62,500 = $74,562.50. So $74,562.50 is your remaining entitlement.

4. What’s your maximum no down payment purchase price?

Easy, just multiply your remaining entitlement by four. So in this case $74,562 x 4 = $298,250. This is the most home you can buy without a down payment.

5. How much does your desired purchase price exceed your maximum no down payment price?

Let’s say the house you want to buy cost $375,000. That exceeds your maximum no down price by $76,750 ($375,000 - $298,250 = 76,750).

Once you have this figure, calculating your down payment is easy. It’s simply 25% of that number. $76,750 x .25 = $19,187.50 Now this may seem like a large chunk of cash.

But I would argue that for less than 8% down you would get an incredible interest rate without needing perfect credit, have the ability to keep your other home, and not have to pay monthly mortgage insurance (or what is commonly known as PMI). There is not another loan program on the market that will allow you to do this. This is part of what makes the VA loan program so incredibly powerful.

Is there another option?

Here’s another pretty cool tool you can use to avoid this entire rigmarole. The “One-Time Restore”. If you have a home you purchased with a VA loan that is currently paid off, you can request a one-time restore of your full eligibility without disposing of the property. The VA will only allow you to do this once in a lifetime. Which I hope they remove that stipulation one day. Nevertheless, it will come in handy for the veteran that needs or wants to hang onto their property.
Now whether you’re a veteran who will not have a limit to how much house they can buy, or you’ll be limited by the amount of entitlement you currently have in use; you still must have the ability to repay the loan. Just because the VA doesn’t have a loan limit, that does not mean a lender is going to lend you enough money to buy a million dollar estate on a firefighter’s salary.

The VA program not having a maximum purchase price ensures veterans of all income levels can take advantage of all the benefits of the program. But you’ll still need to credit and income qualify for the home you want to buy.

Now that you understand that potentially the only thing limiting your purchase price is your income, you may be asking what sources of income can you use to qualify. So be sure to check out my video “what sources of income can you qualify with” where I’ll be giving you a breakdown of different income sources, and how they’re observed by lenders.
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About the Author:
Ed Andrews III

Ed Andrews III is a mortgage loan officer, and U.S. veteran of the Iraq & Afghanistan Wars. He is an expert on VA home loans, and dedicated to helping veterans achieve home-ownership.
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