New VA Loan Limits

VA guaranteed loans do not have a maximum dollar amount, but lenders who sell their VA loans in the secondary market must limit the size of these government-backed loans to the maximums prescribed by GNMA (GNMA). The lending limits have been woefully inadequate to make VA loans competitive with the conventional Fannie Mae and Freddie Mac loans. As a rsult, VA loans have declined rapidly. However, in light of the current economic conditions and credit crunch, VA loans are making a come-back.

Good News about VA Loans
On October 10th, 2008, the President signed S. 3023, the Veterans' Benefit Improvement Act of 2008. The key provisions of this new law include:

1. Authority to guarantee adjustable rate mortgages (ARMs) and hybrid adjustable rate mortgages (HARMs) has been extended through September 30, 2012.
2. The maximum guaranty for cash-out refinance loans has been made the same as purchase loans - they are no longer limited to $36,000. In addition, cash-out refinance loans may now be made up to 100% of the appraised value of the home, which is an increase from VA's previous threshold of 90 percent.
3. The temporary increase to the maximum guaranty has been extended through December 31, 2011. When combined with new locality-based Freddie Mac conforming loan limit in January 2009, VA's maximum county "loan limit" will be $1,094,625 ($1,641,937.50 in Alaska, Guam, Hawaii, and the Virgin Islands). This results in unique county "loan limits" for VA.

VA Jumbo loan limits have also increased. You can now apply for a VA Jumbo Loan up to $1,000,000 with no money down under new VA Loans Maximum Guaranty Amount guidelines:

1. No money down for qualified borrowers for home loans up to a maximum of $417,000 or the higher limits for certain counties.
2. The VA guarantees the loan up to a maximum guaranty amount of 25% of the loan.

Click here to download more information on how the new laws affect VA purchase and refinance loans.

These new limits, combined with VA's lenient credit underwriting, will make these loans even more popular still. If you were to apply for a conventional loan, you'd need a credit score of at least 680 if you're putting 20% down and at least 700 if you're starting up with less than 20% equity. VA doesn't focus on credit scores. VA lenders have minimum credit score requirements, but they are lenient. And, as long as you have less than 41% debt-to-income ratio, a good payment history over the past 12 months and the ability to pay the mortgage loan, you could potentially qualify for 100% financing. That's unheard of these days.

The VA home loan benefit is one of the most valuable and most often used benefit that active duty military, unmarried surviving spouses of deceased veterans, reservists and veterans have. With conventional credit being on the squeeze, it only makes sense to use this valuable benefit. Complete the free loan quote on this site, so we can quickly put you in touch with a VA-approved lender today.