VA Loan Limits in 2021
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Many military borrowers with full VA entitlement aren’t subject to VA loan limits. For those who have remaining entitlement, though, the VA loan limit in 2021 ($548,250) will apply in most parts of the United States.
Your VA entitlement is the maximum loan amount that the U.S. Department of Veterans Affairs (VA) will guarantee to pay your lender if you default on your mortgage.
You typically have full VA entitlement if you don’t already have an active VA loan. However, if you have an active VA loan with remaining entitlement or one that’s in default, VA loan limits will apply.
What are VA loan limits?
VA loan limits refer to the maximum loan amount the VA will repay your lender. If you have full entitlement, loan limits don’t apply and the VA will repay your lender up to 25% of the loan amount.
If you have an active VA loan, you may have remaining entitlement. In that case, the VA will guarantee a) up to 25% of the conforming loan limit in your county, minus the amount of entitlement you’ve already used or b) 25% of the loan amount, whichever is less.
The VA loan limits in 2021 follow the Federal Housing Finance Agency (FHFA) conforming loan limits. In most of the U.S., the limit for one-unit properties is $548,250. You can borrow more than the loan limit, but if you do, you’ll need to make a down payment. Lenders typically require that your down payment and entitlement cover at least 25% of your VA loan amount.
VA loan limits in 2021
VA home loan limits were eliminated for those with full entitlement as of Jan. 1, 2020, by the Blue Water Navy Vietnam Veterans Act of 2019. Previously, all VA borrowers were subject to FHFA conforming loan limits.
But while VA loan limits no longer apply, there are still lender limits on the amount you can borrow. Lenders evaluate how much you can borrow based on your income and assets, the amount of debt you currently have and your credit history.
When do VA loan limits kick in?
VA home loan limits come into play if you have remaining VA entitlement. You may need to make a down payment if your loan amount is more than $144,000, according to the VA. You can look up the conforming loan limit in your county on the FHFA website.
In most areas of the country, the max VA loan amount is $548,250. However, in some high-cost areas, the limits can go up to $822,375.
How your VA loan entitlement works
Eligible military borrowers are eligible for two types of VA loan entitlements, basic and bonus.
VA basic entitlement vs. VA bonus entitlement
VA basic entitlement: The basic entitlement guarantees that the VA will pay lenders the lesser of 25% of the loan amount or $36,000. Lenders typically allow you to borrow up to four times the amount of your basic entitlement, which is $144,000.
VA bonus entitlement: The bonus entitlement applies if you want to borrow more than $144,000 to buy a home. The VA will pay your lender up to 25% of the loan amount if you default.
What does full vs. remaining entitlement mean?
In general, having a full entitlement means you don’t have an active VA loan or a VA loan in default that hasn’t been repaid. Here are the requirements for each in more detail.
|You may have full entitlement if…||You may have remaining entitlement if…|
|You’ve never used your home loan benefit.||You have an active VA loan.|
|You’ve paid off a previous VA loan and sold the home.||You’ve paid a previous VA loan off and still own the home.|
|You used your VA loan, had a foreclosure or short sale and repaid the VA loan in full.||You had a foreclosure or short sale on a VA-backed home loan and haven’t repaid the VA loan in full.|
|You’ve refinanced your VA loan into a non-VA loan and still own the home.|
|You had a deed in lieu of foreclosure on a previous VA loan.|
|You had a foreclosure on a previous VA loan and did not repay loan in full.|
VA loan limit example
Let’s say you want to buy a $300,000 home in Maricopa County, Arizona.
If you have a full entitlement:
You could borrow up to $300,000 with no down payment, subject to lender approval. The VA would guarantee up to 25% of the loan amount, or $75,000.
If you have remaining entitlement:
Your loan amount would need to be within the VA county loan limit. The limit in Maricopa County is $548,250, so your loan would meet that requirement.
The VA will guarantee either 25% of the loan amount or 25% of the county loan limit, minus the entitlement you already used — whichever is less. You can find out your remaining entitlement from your Certificate of Eligibility (COE).
|Here’s how the math breaks down if you already used $50,000 of entitlement:|
|The county loan limit is $548,250
25% of $548,250 is $137,062.50
$137,062.50 – $50,000 (entitlement used) =
|The loan amount is $300,000
25% of the loan amount is $75,000
|Since $75,000 is less than $87,062.50, the VA would guarantee $75,000|
How many VA loans can you have?
The VA doesn’t set a limit on how many loans you can have. However, you are limited by the entitlement amount; once you use your full entitlement, you’ll need to make a down payment. You’re also limited by whether a lender will approve you for multiple home loans.