VA limits VA loans

VA Loan Limit Questions

December 19, 2012

VA Loan Limit Questions

The Department of Veterans Affairs recently posted the VA loan guaranty limits for 2013. In some cases the guaranty limit, established by county and updated on a yearly basis, remains the same. In other cases that limit may increase or decrease depending on market conditions and other factors.

With the changes for 2013, many questions arise. Some borrowers are unclear on how the VA loan limits affect their ability to borrow money under the VA Interest Rate Reduction Refinancing Loan program, others want to know what happens to a VA loan application that was started in 2012 and finished in 2013. Fortunately the VA has answers for these questions and more.

Answering questions, the VA anticipates one very common one; according to a recent VA mortgagee letter, “…there is no maximum VA loan, which means lenders can make VA loans in excess of the loan limit for a county; however VA’s guaranty will be limited to 25 percent of the county loan limit.”

When it comes to the question of Interest Rate Reduction Refinancing Loans, the VA guidance is clear and specific: “The county loan limits do NOT apply to IRRRLs. The law states that VA shall guarantee at least 25 percent on an IRRRL, regardless of whether the loan exceeds the limit for the particular county.” Borrowers should not be worried about VA loan limits for new purchase loans applying to their IRRRL transaction.

What about the question of loans started in one year and finishing up in the new year? The VA calls these transactions, “Loan Applications in Process.” The VA guidance for these loans includes the following:

“In instances where a county loan limit has decreased, VA will honor the previous higher limit if a contract (not required for refinances) or Uniform Residential Loan Application (URLA) has been signed and dated by the borrower prior to January 1, 2013. Lenders should contact the appropriate VA Regional Loan Center when this situation occurs.”

Borrowers with further questions on these issues should contact the Department of Veterans Affairs directly by calling 1-800-827-1000.

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


  1. leon anderson

    Bruce: I am a veteran with a VA loan. We plan to sell our house ourselves in the Spring and move to Placer county. What, if anything, can I do to prequalify for a new VA loan. This last loan took months to get in place and I want to avoid the delay. Thanks.

  • Joe Wallace

    One issue you would need to work out is your VA loan eligibility. You would need to have your VA loan eligibility restored following the payoff of the original loan--restoration of full VA entitlement is not automatic and VA requires proof that the original loan as been paid in full in order to restore full entitlement. That said, you are also free to apply for a new loan with any remaining unused entitlement you may currently have, though the terms and conditions of the new loan would be different than with a VA loan using full entitlement. You can pre-qualify at (a private company, not a government agency).

Leave a comment

Your email address will not be published.