The phrase “VA loan limit” does not refer to the amount that borrowers are allowed to finance on a home. Instead, this type of limit restricts the level of financial liability that the VA itself is willing to assume on behalf of a home purchaser. In actual practice, therefore, the limit becomes a controlling factor in the amount of financing that a bank will issue on a given home.

VA loan limits are not standardized across the nation, but instead vary on a county-by-county basis. In most cases, the VA loan limit is based on the median home price in a given county. For example, the VA loan limit in Marin County, California is almost a million dollars, while the limit in Boulder County, Colorado, is less than half that amount. The VA publishes an extensive list of loan limits to assist prospective home buyers, but not all counties in the nation are listed. For 2013, unlisted counties have an automatic VA loan limit of $548,250.

Borrowers must understand how to interpret the loan limit information published by the VA. Currently, the VA uses a 25% rule for calculating the maximum guaranty offered for a particular county. To determine the maximum guaranty, multiply the VA loan limit listed by 0.25. This maximum guaranty amount applies to loans in excess of $144,000.

For assistance obtaining a VA loan, consider working with us. Based in New York, we have extensive experience helping veterans navigate the complex procedures needed to work with banks issuing VA loans.

Contact one of our loan consultants for more information.

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