2022 Limits for VA Loan
What are the VA loan limits for 2022? The short answer is, if you have never used your VA loan benefits before or have had your VA loan entitlement restored to 100% (by paying off the VA loan, selling the home, and applying for restored entitlement with the VA you have NO VA LOAN LIMIT. No loan limits make it potentially easier to buy a larger single-unit home, a multi-unit property, or even a mixed-use property that is primarily residential.
Thanks to federal legislation, the Department of Veterans Affairs gained the ability to provide government guarantees to participating VA lenders for VA home loans above the annual per-county VA loan limits. While this does not mean that VA borrowers can apply for unlimited funds to purchase a home, it does improve the buying power for those who qualify.
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Why Is There No VA Loan Limit?
The actual truth is, there ARE still VA loan limits for any VA borrower with less than 100% entitlement. We’ll discuss those loan limits below but for those who do have full entitlement, starting in 2020 the VA loan limit for mortgages above $144,000 no longer applies thanks to federal legislation in the Blue Water Navy Vietnam Veterans Act.
That legislation accomplished many things at once. One of those was the elimination of the VA loan limit as described above.
This means that, according to the VA, all eligible VA borrowers not only have the option of a zero-down home loan with no mortgage insurance but now have the ability to apply for a loan with limits they negotiate with the participating VA lender.
Who Is Eligible for the No-Loan-Limit VA Mortgage?
Borrowers with FULL VA LOAN ENTITLEMENT are eligible to apply for a VA loan with no loan limits. All others will be subject to loan limits set each year by the Federal Housing Finance Authority (FHFA). Who has full or 100% entitlement?
A borrower is said to have 100% or “full entitlement” if ANY of the following is true: i
- The borrower has never used the VA home loan benefit;
- The borrower has paid off a previous VA loan and sold the home;
- You’ve used your home loan benefit, but had a foreclosure or short sale and have repaid the VA.
If you have used your entitlement but are eligible to have it restored, know that it may not be automatically restored. Contact the Department of Veterans Affairs to learn how to apply to get your 100% entitlement back. It is a good idea to start this process as early as possible in case you have any complications that may require further assistance.
Applying For A VA Loan Without Full Entitlement
Borrowers don’t always use their full VA home loan entitlement. In such cases, a borrower who applies for a loan with partial entitlement has a loan limit which are based on the same limits used for conventional mortgages. Your VA mortgage will have a loan limit that was set by the Federal Housing Finance Agency for that county.
Who Has “Partial Entitlement” for a VA Home Loan?
Circumstances vary but in general, you may have partial entitlement remaining if you:
- Have an active VA loan you’re still paying on;
- Paid off a previous VA loan in full and have not sold the property;
- Refinanced a VA mortgage into a non-VA loan and still own the home;
- Had a VA “compromise claim” AKA a short sale but did not repay the VA;
- Had a deed in lieu of foreclosure on a previous VA loan;
- You had a foreclosure on a previous VA loan without repaying the VA in full.
Where Do I Find Out How Much VA Loan Entitlement I Have Left?
Your VA Certificate of Eligibility (COE) has a section describing how much entitlement remains on your VA mortgage loan benefit. If you do not see 100% entitlement but feel you should have your full amount, you should contact the Department of Veterans Affairs directly to see how to have your entitlement restored.
Some borrowers get confused by the COE. They see a line showing a dollar amount when full entitlement is available–$36,000. That figure is NOT how much you are limited to borrow for the mortgage. Instead, that dollar amount is the figure the VA would pay to the lender for loans at or below $144,000 that go into foreclosure.
For VA mortgages above that amount, the VA promises to pay 25% of the loan when it is approved for more than $144,000. These guarantees are why your lender can offer you a lower interest rate and a no-money-down mortgage.
What Do I Need to Know About VA Loans That Exceed VA Loan Limits?
If you are applying for a VA mortgage with partial entitlement, and the loan exceeds the county limit, you may be required to pay the difference between the limit and the sale price in cash. This generally cannot be financed; it’s a similar situation to when the seller establishes an asking price for the home but the appraised value of the property is lower than the sale price. In such cases, if the seller will not reprice the home the borrower can either pay the difference in cash or walk away from the mortgage. You cannot finance the difference in this instance, either.
2022 VA Home Loan Limits
In 2022, the maximum VA loan limit for single-unit properties is $647,200. The upper loan limit, the “ceiling” for single-unit properties in typically high-cost areas will be $970,800. These loan limits are the same as those used for Fannie Mae and Freddie Mac
VA loan limits will generally either stay the same or increase–the Federal Housing Finance Agency official site states clearly that even if home values are declining, the loan limits will not be adjusted downward.
What You Need to Know About VA Home Loan Lending Limits
VA loan limits–and the lack of them–involve the amount of money you can borrow once you have financially qualified for the mortgage. Just because you are eligible to apply for a VA mortgage after having served the minimum time in uniform does NOT mean you are automatically approved for a major credit line. You will be required to credit-qualify for the mortgage in any case.
Your lender will need to know you are basically eligible for the VA loan program, get a copy of your VA Certificate of Eligibility, and review your credit application. The loan officer will pull your credit reports, review your FICO scores and repayment history and the other typical steps it takes to approve a mortgage.
A lack of VA loan limits also does not mean you can apply for more money than the home loan requires with the intent of taking out the difference in cash. This is not permitted. In general, government-backed mortgage programs do not permit “excess cash back” to the borrower at closing time except where refunds for money paid up front is concerned.
If you paid for something in cash that you later changed your mind about and had rolled into the loan amount, a refund is due–and permitted under VA loan rules.
But a home loan cannot be used like a cash-out refinance and there is no provision for “unrestricted funds” back to the borrower at VA home loan closing time if not in the form of a refund.
And finally, borrowers should also be aware of the lender standards angle. Just because VA mortgages have no loan limit for those with 100% entitlement, that does not mean your participating VA lender won’t have an upper limit for a home loan in your housing market. Lender standards also apply in addition to VA loan rules, so it’s smart to remember that you’ll need to negotiate the loan in a variety of ways including the loan amount.
>> Interested in a zero down payment possible home loan with no PMI? For a no-obligation, free consultation regarding your VA Loan eligibility, please go here.
- Getting Started With VA Loan Benefits
- VA Loans, Investment Properties, and Deployments
- VA Loan Occupancy Rules: What You Need to Know
- The VA Loan Certificate of Eligibility
About the author
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.