The VA loan limits will be increasing for 2019, letting veterans who plan to use the benefit keep pace with the cost of housing.
If you are familiar with the VA Loan Guaranty Program, you know that the Department of Veterans Affairs doesn't loan you money when you buy a home. Rather, they guarantee to the lender that you are good for the money. That allows you to get a loan without a down payment, and does away with many of the credit requirements that lenders look for before they loan people money for a home.
As a veteran you have access to this benefit, something civilians don't have -- and wish they did.
VA Limits For Conventional Loans Increased
The VA doesn't set a limit on how much you can borrow, but they are limited by law on the amount of liability they can assume, which, in turn, usually affects the amount of money an institution will lend you. Those loan limits vary by county, since the value of a house depends in part on its location.
Each year the VA changes the amount of money it will guarantee, a shift designed to keep up with housing costs.
For 2019, the maximum amount the VA will guarantee, or "underwrite," to a lender will be $484,350, an increase from $453,100 in 2018.
Any loan above that amount is known as a "jumbo loan" instead of a "conventional loan," and usually requires a down payment, or comes with a different interest rate.
Of course, as much money as that is, in many parts of the U.S. it won't buy you much of a house. These high-cost areas have special, higher loan limits that are set by law. If you are in one of those areas, your limits for a conventional loan are higher than the national rate.
High-Cost Ceiling Increased To $726,650
By definition, a high-cost area is one where the median home value is 115 percent over the conventional loan limit. Limits in these areas are set at the median home value up to a maximum amount of $726,650, although many are less than that.
These areas are broken down by county, so all home loans underwritten by the VA in those counties have the same limit.
All home loans that are within the county maximums in high-cost counties will be considered conventional rather than jumbo loans. That means you can still buy a home with no down payment, possibly pay a lower interest rate and may be able to find financing more easily.
Remember, the lender still has to verify your credit and ability to repay a loan before they will lend you any money.
See a full list of the high-cost counties here.
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