Karen and the VA Loan Limit That Does Not Exist
Karen is a first-time VA buyer, and she is a fictional example of a situation that comes up often. She has read online that her VA loan stops at the county limit, so she plans to shop for a much smaller home than she may be able to afford, or she assumes she needs a big down payment to go above that number. Here is the surprise: for most Veterans, there has been no VA loan limit since January 2020.
What changed in January 2020
The Blue Water Navy Vietnam Veterans Act of 2019 removed the VA loan limit for Veterans who have full entitlement. The county loan limit most people still quote used to cap how much the VA would guarantee. For a Veteran with full entitlement, that cap no longer applies.
The old number stuck around because it was repeated for years in articles, forums, and conversations with agents. It is still accurate for one group of buyers, which is why the confusion continues.
What full entitlement means for Karen
Entitlement is the amount of your VA benefit available to guarantee a loan. Karen has never used her benefit, so her entitlement is full. That means the VA is not what limits how much she can borrow.
That does not mean anyone can borrow any amount. It means the limits come from somewhere else.
The two real ceilings
The first ceiling is the appraised value. The home has to appraise for the price you are paying. If the appraisal comes in short, the numbers have to change, no matter what the benefit allows.
The second ceiling is the lender's income math. The lender looks at Karen's income, her monthly debts, and her residual income, which is what is left over after major obligations and living costs. Credit also matters. If the math supports the loan, the loan can move forward. If it does not, the county limit was never the reason.
Individual lenders can also have their own policies on loan size, so it is worth asking early rather than assuming.
When the county limit comes back
The county limit returns when entitlement is still charged. A common example is an earlier VA loan that is still using part of it. In that case, the limit applies to the remaining entitlement, and a down payment may be required on the portion of the loan above that limit.
This is the group the old number was built for, and it is why the first question I ask a VA buyer is whether their entitlement is full or charged.
What you can do today
Request your Certificate of Eligibility. It shows your entitlement information, and it tells you which set of rules you are working under. Once you know that, you can stop planning around a limit that may not apply to you.
Then build your price range from the inside out. Start with what your income and debts support, not with a county chart. After that, remember the home still has to appraise.
Why this matters in Charleston
First-time VA buyers here often start their search by guessing at a ceiling they heard from a friend or a coworker. I would rather help a Veteran set the range from real income math before they ever tour a home. It saves time, and it keeps good options on the table.
If you are a Veteran in the Charleston area and want to know where your entitlement stands, call me at 843-LOW-RATE. I am Jason Sharon, a licensed mortgage broker at Home Loans Inc, and I find the path.
Home Loans Inc - Jason Sharon, Mortgage Broker. Company NMLS #1728740, Jason Sharon NMLS #1281448. Equal Housing Opportunity.
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