Veterans are no longer restricted to a loan limit beginning January 1, 2020. Previously, veterans were limited by the same restrictions set by the Federal Housing Finance Agency on conforming loans. While these limits were national in nature, there were exceptions for high-cost counties and jumbo loan procedures.
The elimination of loan limits doesn’t mean that veterans will have unlimited borrowing power. Buyers must still qualify with enough income and credit requirements to meet the lender’s requirements to qualify for the loan.
Lenders can set their own in-house maximum loan amounts which means it could vary from lender to lender. Veterans who have an active VA loan or have defaulted on a previous VA loan are still limited by the previous loan limits.
The VA funding fee is increasing from January 1, 2020 to 2.3% of the loan amount for “first-use” borrowers from the previous fee of 2.15%. Subsequent use borrowers will pay 3.6% of the loan amount instead of the current 3.3%.
Beginning in 2020, the funding fees will be the same for regular military, National Guard and reservists. At the same time, Purple Heart recipients are exempt from paying the VA funding fee.
It is recommended that a veteran, as well as any buyer, be pre-approved before beginning the home buying process. Veterans can find answers to specific questions they may have from a qualified and trusted loan professional. Call us at (313) 909-5851 for a recommendation.