Just like conforming loan limits, 2019 VA loan limits have increased for loans closed between January 1 – December 31, 2019. Each year, FHFA considers increasing conforming loan limits based on home prices. For the third year in a row, these loan limits have increased dramatically. Each year, VA loans follow the conforming loan limits. Therefore, the new VA loan limit 2019 is $484,350 compared to the 2018 limit of $453,100. Plus, the single-family residence VA high balance limit is $726,525 which helps those buying in higher cost counties. Raising VA loan amounts helps current service members, Veterans, and surviving spouses use probably the best home loan in America.
2019 VA Loan Limits Benefits
It is difficult for buyers to find affordable housing since home prices have increased. Military families are no different. Higher loan limits bring more home prices within range. We have already seen borrowers who will benefit by the 2019 VA loan limits.
Reasons New VA Limits Help Borrowers
- Avoid VA jumbo loan down payment
- Allows higher loan amounts when using multiple VA loans at once
- Allows higher loan amounts after a VA foreclosure or short sale
- Obtain more funds in a VA cash-out refinance
- Larger VA Renovation Loan
Sound beneficial? Let’s expand on each.
Higher VA Loan Limits & VA Jumbo Loans
Although VA jumbo loans are an amazing way to finance a high end home, higher conventional VA limits are better in most ways. With the higher 2019 limits, more are able to potentially buy with no down payment. For instance, 2018 VA limits are $453,100 in most counties. Therefore, a VA buyer exceeding this price would need a down payment. Choices include staying at the $453,100 VA loan or exceeding this threshold with a VA jumbo loan. Either case would require a down payment.
With the VA loan limit at $484,350, the same buyer could purchase a home up to this limit with 100% financing. Assuming the buyer has full entitlement available. That is $31,250 more buying power with zero down payment!
Another excellent feature is for buyers who exceed the 2019 limit and use a VA jumbo loan. The loan limit increase lowers the required down payment. VA jumbo loan down payment requirements start as a very low percentage. Then, increase as the purchase price goes up. If looking to use a VA jumbo loan to buy or refinance a home, click the button below to learn the value and more details.
2019 VA Loan Limits With Multiple VA Loans
Many do not realize that it is very possible to have 2 VA loans at once. Active military and military Veterans have a basic entitlement of $36,000. This allows for financing up to the VA loan limits on one VA loan. Additionally, there is bonus entitlement which allows for VA jumbo loans, another VA loan after defaulting on a prior VA loan or to have multiple VA loans at once.
Multiple VA Loan Characteristics
- Convert current home to an investment property
- Potentially buy with zero down payment
- The minimum loan amount is $144,000
- Down payment requirement starts at a certain level
Notice the last one – down payment requirement. VA loans are not always a zero down payment loan. In cases where a buyer uses bonus entitlement to purchase a home, the new loan first must exceed $144,000. Then, the amount of basic and bonus entitlement available determines the price limit which no down payment is required. So, this varies with each person, depending on the entitlement remaining, but at a certain point, down payment would be required. Just like VA jumbo loans, the down payment starts at a low percentage. Then, it increases as the price does.
Fortunately, the higher VA loan limits help more buyers achieve a no down payment purchase while having multiple VA loans. Keep in mind, if the prior VA loan is paid off prior to the new VA loan closing, the same rules apply for a first time use. There is not a minimum loan amount, plus the buyer may finance up to the full VA loan limit with no money down. Of course, assuming qualification. Want to learn more about multiple VA loans at once?
2019 VA Loan Limits Help Prior VA Foreclosure & Short Sale
For various reasons, life happens and the result could mean losing a home. When the Veterans Administration takes a loss from a foreclosure or short sale, it affects the Veteran’s available entitlement. Basically, the amount of loss reduces the entitlement available (very similar to a buyer owning another home with a VA loan). However, once the required timeline has surpassed for a prior foreclosure or short sale, there is an opportunity to use a VA loan again.
When entitlement is tied up from a prior negative housing event, the VA lending limit plays a huge role. The higher the loan limit, the more a Veteran may access for a new VA loan. The same rule applies with the minimum $144,000 loan amount. Once above this amount, a no money down purchase is available again, but at some point, a down payment is required. Since the limit has increased for 2019, this will increase the buying power for VA buyers which have experienced a VA foreclosure or short sale.
2019 VA Loan Limits Aids VA Refinancing
Today, there is more home equity available than ever before. Thus, many have an option to access the equity. This may be accomplished with a VA cash-out refinance or an owner may open a home equity line/loan. A VA cash-out loan is a new first mortgage which replaces the current mortgage (the current mortgage does not have to be a VA loan) and allows cash for other reasons.
VA cash-out loans allow up to 100% of the appraised value as determined by a VA appraisal. Since the VA lending limits have increased, homeowners have the ability to borrow a higher amount. Therefore, homeowners could potentially benefit from combining higher loan limits with higher appraised values.
VA Cash Out Loan Benefits
- Pay off current mortgage to reduce payment, rate, or get rid of PMI
- Consolidate debts such as student loans, credit cards, a line of credit, or loans
- Finance home improvements
- Combine everything into one loan
- Pay for a college education, wedding, vehicle, RV, and more
2019 VA Loan Limits = More Renovations
A little-known benefit we offer is the ability to purchase or refinance a primary residence and complete up to $75,000 in renovations. There are many benefits of a VA renovation loan, but now even higher loan amounts are allowed. So, higher limits can increase the purchase price, home improvements, or both.
For a purchase, the OVM VA renovation loan will lend up to 100% of the purchase price plus $75,000 in nonstructural renovations. Imagine the possibilities:
- Buy a fixer-upper home
- Expand available homes
- Convert the house into your dream home
- The seller could market home with renovation possibilities.
- Purchase a foreclosure home in current condition
All of the above could be a possibility with potentially no money down.
As mentioned above, current homeowners could use a VA cash-out refinance for home improvements, but what if there is not enough equity for the desired level of improvements? Since VA renovation loans use the “after improved value,” more equity could be available. Therefore, more renovations could be completed.
Why VA Loans May Be the Best Loan in America
By now, it is easy to tell that VA loans provide a wonderful financing tool to the military, Veterans, surviving spouses, and their families, but there are many other helpful guidelines and strategies within VA to help create affordable homeowner situations. Check out a few other VA loan resources to learn more: