VA loans

VA Loan Reader Questions: Maximum Mortgage Amounts

April 30, 2012


VA Loan Reader Questions: Maximum Mortgage Amounts

A reader asks, “I want to buy a home in Mesa, Maricopa County, Arizona, 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 deductible? Thank you for any information.”

There’s a big difference between the maximum amount a borrower can apply to get and how much of that loan money the VA will guaranty.

Technically speaking, there is no limit in the VA rules to how much the borrower can apply for, but realistically speaking the borrower will be limited by credit rating, how much the lender is willing to offer, and other factors.

Additionally, VA loans don’t permit cash back to the borrower on new purchase VA home loans, so the amount of the home loan is also limited to the price of the property plus allowable add-ons such as energy efficient improvements, permitted closing costs, etc.

The Department of Veterans Affairs says of maximum loan amounts:

“VA does not impose a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan; however loan limits establish the maximum possible guaranty on a loan. The maximum guaranty amount (available for loans over $144,000) is 25 percent of the 2012 VA Limit shown below.”

This information is referenced in VA Circular 26-12-1, which also says, “A veteran with full entitlement available may borrow up to the limit shown below and VA will guarantee 25 percent of the loan amount. If a veteran has previously used entitlement that has not been restored, the maximum guaranty amount available to that veteran is reduced accordingly. Lenders should check their own investor requirements regarding guaranty amounts and down payments.”

You can view a by-county list of VA loan limits from a link provided in VA Circular 26-12-1`, and for all counties not listed the VA states, ” For all counties other than those listed…the 2012 Limit is $417,000.” The reader question included a query about lender fees, which may vary from bank to bank, (allowable fees and expenses are regulated by VA rules) but it’s best to consult an individual lender for information on the fees and expenses for a given housing market. The reader also asked about tax information; those are details best answered by a tax professional.

Do you have a question about VA home loans? Ask us in the comments section.

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  1. Leonard Lelii

    What is the certificate of eligibility? We received one and it shows "money amount" What is that money amount? What EXACTLY is the certificates purpose. Thank you.

    • Joe Wallace

      How did you apply for your VA Certificate of Eligibility? Electronically, via regular mail? Or did a lender assist you? In any case, the VA COE is paperwork which shows the borrower is eligible for a VA home loan, and shows the amount of guaranty the borrower is eligible for. Borrowers who have a COE are free to apply for a VA home loan through any participating lender. You cannot apply for the VA home loan without a certificate of eligibility. Hope this helps!

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