What Are the VA Loan Limits For 2023?
Home buyers who qualify for a VA loan can enjoy many perks with this loan type. One of those perks is relatively flexible VA loan limits. There are few formal limits tied to the VA loan, it’s helpful to know how much you can borrow.
Who Can Use A VA Loan?
Here’s how a VA loan can be used:
- Buy a primary residence
- Build a new home, rebuild or repair an existing home
- Refinance an existing conventional or Federal Housing Administration (FHA) loan
- Refinance an existing VA loan with a VA IRRRL Streamline Refinance
VA Loan Limits For 2023
If you have a full entitlement, you won’t find any VA loan limits.
However, the amount eligible home buyers can borrow is limited by VA-approved lenders. For example, Rocket Mortgage® offers VA jumbo loans of up to $2 million.
How Do Your VA Entitlements Affect The Amount You Can Borrow?
While the VA isn’t the lender and doesn’t tell lenders how to make their lending decisions, it does make a determination about how much insurance it is willing to provide lenders on a loan. The amount of insurance is known as your entitlement and it covers up to 25% of the loan amount.
Your Certificate of Eligibility (COE) outlines your entitlement. Full entitlement means the VA will cover up to 25% of the loan amount.
In order to receive full entitlement, you’ll need to meet on of the following requirements:
- First-time home buyer
- Bought a home with a VA loan and repaid the loan in full
- Home loan ended in foreclosure or short sale and repaid the loan in full
If your COE indicates that you have a remaining entitlement, there are limits on the amount you can borrow. The VA will pay up to 25% of the county loan limit – as defined by the Federal Housing Finance Agency (FHFA) – minus the amount of your entitlement that you’ve already used.
You can use your remaining entitlement to purchase a second home with another VA loan.
You may have a remaining entitlement if you:
- Are repaying an active VA loan
- Purchased your home with a VA loan, have repaid it in full and still own the home
- Refinanced a previous VA loan into a non-VA loan and still own the home
- Entered into a short sale of a home purchased with a previous VA loan and didn’t repay the lender in full
- Signed over ownership of a home you purchased with a VA loan to your lender through a deed in lieu of foreclosure
- Had a foreclosure on a previous VA loan and didn’t repay the VA for its loss
What Will Lenders Use To Determine How Much They Are Willing To Lend You?
While the VA loan doesn’t have a set loan limit, most lenders set their own limits. The loan limit will vary based on several factors, including:
- Credit score
- Debt-to-income (DTI) ratio
- Conforming or jumbo loan
- Fixed-rate or adjustable-rate mortgage (ARM)
- The size of the down payment
For example, Rocket Mortgage® prefers a DTI of up to 38 but will allow a DTI of up to 45 for fixed-rate mortgages and 50% for adjustable-rate mortgages (ARM). And generally, lenders prefer a credit score above 640.
Conforming VA Loans Limits
If you are taking out a VA loan that meets the conforming loan limits set by the FHFA, then you usually won’t have to make a down payment. But buyers looking for a larger loan might have to make a down payment on their VA home loan. The FHFA limits vary from county to county. But as of 2023, the limits range from $726,200 to $1,089,300.
In order to avoid a down payment, you’ll also need to meet credit score requirements. Rocket Mortgage® usually sets a minimum credit score of 580 for VA loans.
VA Jumbo Loan Limits
Jumbo loans are non-conforming loans with loan amounts that exceed the FHFA loan limit. The higher loan amount represents a higher risk for the lender. With that, you can generally exceed stricter credit score and DTI requirements for VA jumbo loans.
For example, Rocket Mortgage® sets these limits for the following types of loans.
Jumbo Loans Up to $1.5 million
- With less than 10% down: 640 minimum credit score
Jumbo Loans Between $1.5 million to $2 million
- With less than 10% down: Down payment of at least 10% required
- With 10% or more down: 680 minimum credit score
VA Loan Limit FAQs
You have questions about VA loan limits. We have answers.
How have the limits on VA loans changed?
In 2020, the VA loan limits were eliminated for loans of over $144,000. As of 2023, eligible VA loan borrowers don’t face a limit set by the VA.
Are there other costs associated with VA loans?
Although the VA loan doesn’t require a down payment, it does require VA funding fees. If you cannot pay these fees upfront, you can roll the amount into your loan.
Do I need to pay 20% down with a VA jumbo loan?
When pursuing a VA jumbo loan, you might not have to make a 20% down payment. For example, you might only need to make a 10% down payment through Rocket Mortgage®.
What is the 2023 limit for VA loans in my county?
The VA doesn’t set specific loan limits by county. However, the FHFA sets conforming loan limits, which range from $726,200 to $1,089,300.
The Bottom Line: VA Loans Don’t Limit You When Buying A Home
If you qualify for a VA loan, you won’t have to worry about loan limits standing between you and your dream home. As you move forward with the home buying process, start an application for a VA loan today.