Can I get a VA Loan that is higher than my County VA Loan Limit?
Yes. A common misconception with VA Loans is that VA Loans aren’t used in your area, or that VA Loan amounts are too low for your City. In the past this was true, but VA Loan changes have improved the picture. VA loans and VA Jumbo Loans are available much higher than $726k, the standard VA Loan Limit for 2023. We lend on VA Loans up to $2m, both with zero down and some down payment depending on available VA Entitlement.
VA Loans at loan amounts above $726,200 are called VA Jumbo Loans, VA High Balance Loans, or VA Super Conforming Loans. While many counties in the country have a $726,200 VA Loan Limit, that isn’t the highest VA loan available for that particular county. VanDyk Mortgage offers VA loans up to $2,000,000 in all the states we serve. What changes is whether the Veteran has full VA Entitlement available, or if partial VA Entitlement applies, the amount of required down payment or home equity needed to meet the VA Guaranty requirements. This is where the VA Loan Limit applies – the formula uses the VA Loan Limit, your available VA Entitlement and the purchase price of the home. Each case is unique depending on your VA County Loan Limit, your available VA Entitlement, and your Home’s purchase price or value for VA refinance.
So what is the benefit of using a VA loan in this scenario? Even with partial VA Entitlement situations, the lower down payments versus conventional loans, competitive fixed rates, no Mortgage Insurance, ability to combine a first and second mortgage, or get cash out up to 100% of your homes value make the VA loan a great financial tool.
Let’s say you live in a county where the VA loan limit is $726,200 (such as Fresno, Riverside or San Bernardino counties in California). You want to purchase a home that is $400,000 with a little of down payment possible. You have a VA loan that was originally $300K outstanding. You can qualify up to $426,200 for another VA Loan with zero money down. If the new home price exceeds $426,200, the math is easy – a down payment of 25% of the difference between the homes purchase price and $426,200 would apply. Let’s say the home is $525,000. So we take the difference, $98,800, divide by 4, giving us a $24,700 down payment requirement for this sample scenario.
The goal of the VA calculation is the reach a guarantee figure of 25% of the loan amount. This can be a combination of the Entitlement and a down payment..
A reminder – Veterans with full VA Entitlement have NO VA Loan Limit anymore.
Here is the math to figure this out for Veterans with partial VA Entitlement:
1. First we calculate your remaining VA entitlement. Say your current VA Loan was originally $200K, that is the amount your VA Entitlement is reduced or charged.
2. Take your county loan limit (in this case $726,200) and multiply times 25% to reach your maximum entitlement and guaranty available ($726,200 x .25 = $181,550)
3. Subtract the Entitlement outstanding (aka charged) from the figure in #2, that gives us $131,550 in available VA Entitlement.
4. Take your purchase price and multiply times the minimum guaranty required. ($750,000 X .25 = $187,500)
5. Take the Minimum required guaranty ($187,500) and subtract the available guaranty and entitlement for you ($131,550) and it yields us $55,950.
$55,950 represents the minimum required minimum down payment for purchasing a $750,000 property in a county with a VA loan limit of $726,200 for a Veteran or Active Duty Service Member with partial VA Entitlement available of $131,550. $55,950 is a 7.46% down payment for this sample scenario. Now that is a huge benefit for our Veterans. This is far superior to the conventional loan alternatives or even FHA loans.
When your bank tells you that you need to put down 10% or even 20% for a conventional loan, or tells you to put more down on a VA Loan than the minimum requirement, call us direct and go with a VA loan instead. You will be glad you called.
A quick note – our maximum VA Loan Amount is $2.0M, some exceptions allowed. Many VA Lenders are capped at $417K, $424K, $453K, $484K, $625K, $650K, $726K, $729K, or $1m for VA loans. We fund VA Jumbo Loans up to $2.0M with credit scores as low as 580 for qualified Veterans.
VanDyk Mortgage is a VA Direct Lender (since 1987) offering VA Loans such as VA purchase loans, VA Streamline Refinance, VA IRRRL, VA Refinance Loans, VA Jumbo purchase loans, VA Jumbo Refinance Loans, VA Jumbo Streamline Refinance loans, VA Jumbo IRRRL , VA Mortgages of all types.
We are a Direct Lender specializing in Government Loans. VanDyk Mortgage is a HUD Full Eagle FHA Direct Endorsement Underwriter, ie Direct Lender offering FHA Loans such as FHA Purchase loans, FHA Refinance, FHA Streamline Refinance, FHA 203K Streamline Rehab loans, FHA Jumbo, FHA Jumbo Purchase, FHA Jumbo Refinance, FHA Jumbo Streamline Refinance, FHA mortgages of all types. We offer FHA & VA loans in Arizona, California, Colorado, Florida, Georgia, Indiana, Michigan, Tennessee, Texas, Virginia, Washington, & Wyoming.