VA Loan Limits Increased for 2018

December 29, 2017

There was a big announcement in December from the VA. The conforming loan limit for 2018 increased $29,000, setting the new limit at $453,100 for most parts of the country. This is the second increase seen since 2006. This means a buyer using their VA loan benefit can purchase a home up to $453,100 in most parts of the country without making a down payment.

The loan limit isn't a cap on purchase price. Instead it is a cap on how much a buyer can purchase without making a down payment using their VA loan benefits. And in high cost counties, this number is even higher. For example, San Diego, California has a 2017 VA loan limit set at $649,750. You can calculate the loan limit in your county with this great calculator.

It is possible for a buyer to purchase a home over the county loan limit using their VA loan benefits. To do so, the buyer would just need to put down 25 percent of the difference between the purchase price and loan limit. Here's an example:

Purchase price: $550,000

VA loan limit: $453,100

Difference: $96,900

25 percent of difference: $24,225

So in this example, the buyer would need to put down $24,225 to purchase the home using their VA loan benefits. As a reminder, VA loans don't require mortgage insurance. To purchase the same house with a conventional loan and not pay mortgage insurance, the buyer would have to put down 20 percent, equalling $110,000 for the above example.

As you can see, the VA home loan is an amazing benefit to our service members, veterans and their families.

As the go-to agent in my area for military homebuyers, I make it a priority to stay up-to-date on the latest VA loan information. Give me a call today to discuss your VA loan benefits!