How Much Money Will the VA Guarantee for a Loan

By Luke Arthur

The Department of Veterans Affairs, VA, offers a program that allows active military members and veterans to borrow money for a mortgage and have it backed up by the VA. When you use this program, you can avoid making a down payment and paying private mortgage insurance. This program has maximum lending limits that must be adhered to, as well.

When you want to get a loan that is guaranteed by the Department of Veterans Affairs, you will need to make sure that the loan amount is within the loan limits for the program. The VA has specific loan limits for each county in the United States. The loan limits are based on the value of real estate in that area. In areas that have very high real estate prices, you can get a bigger loan guaranteed by the VA.

The amount of the loan you can get is based on multiplying your level of eligibility by four. For example, the majority of veterans have a maximum eligibility level of $104,250. When you multiply that by four, this gives you a maximum loan balance of $417,000. This is the level for most counties in the United States. In some areas, you can get loans that are guaranteed up to $1,094,625 if the VA limit for your county allows it.

Even though the VA will guarantee loans in these amounts, it does not necessarily mean that you can get one. Not every veteran qualifies for a loan for $417,000. To qualify for this type of loan, you have to have the appropriate amount of income and a sufficient credit score. These loans are still underwritten with many of the same standards as traditional loans. Lenders are not willing to give large amounts of money to those who cannot afford to repay it.

If you need to borrow more than the maximum loan amount in your area, it does not necessarily mean that you cannot get a VA loan. If this is the case, you can borrow more than the maximum amount, as long as you qualify for it with the lender. When you borrow more than the maximum amount, you will have to make a 25 percent down payment on the overage amount. The VA will still stand behind the loan.

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