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How Much Loan Can a VA Borrower Get?

I’ve been covering some of the basics of VA home loans in my recent posts, including what the VA does and does NOT do for the buyer. There are a few other basics first time home buyers and Real estate agents new to the VA loan process should know.

One common question the new VA loan applicant wants to know is how much they can borrow with a VA guaranteed loan. There are many reasons for asking—some buyers want to know what the ceiling is, regardless of what they can afford. They want to know, just in case they are able to borrow up to the maximum some day. There’s nothing wrong with dreaming big.

Other buyers are more practical. They want to know if there’s a ceiling on what they can get approved by the VA because they want to compare that limit to what they have budgeted for. Practicality is good.

But the Department of Veterans Affairs doesn’t have a specific dollar amount set for a maximum VA home loan. For starters, the VA doesn’t issue the loan, it only guarantees a certain amount in case the borrower defaults.

The maximum guarantee is based on the market value of the property listed on the Notice of Value, plus the lender’s own requirements.

But even when the maximum loan amount is known based on these factors, does that mean the borrower is qualified to get that full amount? As with conventional loans, not in every case. The lender must be willing to extend the credit—the VA can’t force a lender to issue credit in any case, it can only work with the lender to make the loan more attractive.

I harp on this a lot, but it’s another reason why first time home buyers are encouraged to start planning for a VA mortgage early—they might not realize they are able to be pre-approved to borrow X amount of dollars. Does “Amount X” give them enough room to negotiate when buying a house in a particular market? Does the buyer need to raise or lower their expectations?

Good questions for a newcomer to ask in the earliest stages of VA home loan planning.

Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

4 Responses to How Much Loan Can a VA Borrower Get?

  1. Jim Robbins says:

    I want to buy a home in Mesa, Maricopa County, Az the zip is 85207. How would I find out the maximum amount of mortgage I could borrow? Is this a jumbo loan area? Are the fees any higher for jumbo loans? Are the fees tax deductable? Thank you for any information.

    • Joe Wallace says:

      Hi Jim, thanks for your questions. You can learn more about the VA maximum loan amounts for your county in VA Circular 26-12-1, which is found here: http://www.benefits.va.gov/homeloans/new.asp
      You can pre-qualify online at http://www.valoans.com/, which is a private company and not a government website. Fees may vary from lender to lender and for tax issues it’s best to consult a tax professional for the most current rules and regulations.

  2. Kris Castro says:

    Where can I find the best information on VA construction loans? It seems some lenders know and most don’t. Is this something your firm can help with? It is a home being built in Auburn, CA. Thank you!

    • Joe Wallace says:

      What kind of information are you looking for on VA construction loans? You can always call the VA directly at 1-800 827-1000 for information on general requirements on VA construction loans, but that said:

      As of today, we are not aware of any lender in the country offering VA construction loans. The process of purchasing land and / or building a home is a difficult one utilizing the VA process. If you are going through a builder, then they will usually want to provide the financing for you with two loans. If not, we will briefly explain the process. You would have to go to an interim lender such as a bank or Credit union. They would need to give you a bridge loan for the land and / or new home construction which usually comes in stages.

      Once the home is built and all inspections complete, then you would get approved by a take-out lender utilizing the VA program. At that time, you could utilize http://www.valoans.com or another lender for the take out loan. The lender pays off the bank or credit union that originally lent you the money and creates one new VA mortgage for the Veteran. Since the interim lender can originate loans and will want to make additional money on another loan, they will usually try to give you some added incentive in order for you to give them the take out loan. If this is the type of loan you want, we suggest you research what available options you have and make an informed decision. We would like the business. Thanks for the inquiry.

      VALoans.com Staff
      assistance@valoans.com
      Web Address: http://www.VALoans.com

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