New VA Loan Limits Give Veterans the Chance to Save Money

By Douglas Katz – 09/21/2022

On the heels of last week’s announcement regarding the increase in loan limits for conforming conventional loans, i.e. what Fannie Mae and Freddie Mac will allow, many lenders have also updated their allowable limits for VA Loans.  This was expected, but the release of these limits as an official policy means that new applicants can receive the benefit as well as any clients in process who have not yet funded their deals. While mileage may vary among lenders and geography for the property, new VA limits for one-to-four unit properties will now be $715,000.

The numbers are just that, what is more important is what it means to you.

  • YOU SAVE MONEY ON NEW HOMES – Technically, there is no upper limit for VA Loans if it fits certain criteria such as available entitlement, but there is a jumbo classification for pricing.  In short, the rate for loans under $715,000 will be lower that those that are greater than $715,000.  If you are already pre-approved for the previous upper limit, you should get an updated pre-approval as you may now be able to find properties outside of your previous range.  If you have already locked and were a jumbo loan before the announcement, check with your lender to see if your rate can be adjusted for the new limit.
  • SECOND USE SITUATIONS – If you already have an outstanding VA Loan but retain a portion of you entitlement, you may now be in a better situation.  Subsequent use situations such as these are typically bound by the loan limit.  This may mean you are able to look at more homes than you previously have.  You should definitely check with a lender to see if this increases your opportunities.
  • YOU CAN SAVE MONEY ON A REFINANCE – If you bought in the last 2-years, you may have gotten forced into the jumbo territory to even find a home to purchase.  I saw this a lot in the especially hot markets that were seeing double digit appreciation.  With the increase in loan limit, you may be able to refinance as a non-jumbo loan and get a non-jumbo rate.  This is likely most applicable to anyone who bought in the last year, however, as even jumbo rates were exceptionally low previous to that.

This news often comes and goes without excitement from anyone outside of the real estate industry, but it is really great news for everybody, especially in the still crazy real estate and lending markets.  With inflation and other factors eroding cash flow and savings, any chance to stretch your money should be explored.

I always like to end with a quick PSA.  Make sure that you check out the section of the page covering our commitment to those who served with discounted services.

My lending partner offers a discount as well, so if your buying or refinancing check it out.