Recent VA Loan Changes: Basics and Loan Limits

While we’re proud of all of our mortgage loan programs offered at Altius Mortgage and our partners at Mortgage Ogden, perhaps the area that gives us the most pride is our VA loan services for military veterans, service members and select spouses. Backed by the US Department of Veteran’s Affairs, VA loan programs contain several benefits for those who qualify, from no down payment requirements to great mortgage rates.

One of the most common questions we’re asked about this program by those who are looking to apply: If I qualify, what are the limits to what I can borrow under a VA loan? And as it turns out, some major developments here within the last two years have actually made this area less restrictive for those who qualify, allowing them a wider range of loans covered by the VA than previously. This two-part blog will go into all the recent changes you should be aware of, plus the basics to understand on loan limits if you’re a veteran or military member applying for a VA loan.

2019 Blue Water Navy Vietnam Veteran’s Act

A very important event to be aware of down these lines was the passage of what’s known as the Blue Water Navy Vietnam Veteran’s Act in June of 2019. While the primary purposes of this act were to change certain benefits for Vietnam veterans who were exposed to certain herbicides or chemicals, the act also contained vital language covering anyone eligible for the VA loan program.

The changes, which we’ll go over further in our upcoming sections, were in several areas. They touched on everything from loan limits to eligibility changes for veterans, generally expanding the range of individuals who qualify while also expanding the maximum borrowing amounts for many. Let’s dig into how they did this.

Loan Limits Vs. Cost Limits

It’s important as we move forward here to understand that loan limits and cost limits are not the same thing in a mortgage situation. Loan limits only apply to the amount the VA will actually approve for a loan; cost limits do not apply to any loan, including VA loans.

One more important piece here: Any person who is eligible for a VA loan but also has other VA guaranteed loans already active may fall under different restrictions. Our subsequent sections will go into the specific changes the 2019 Blue Water Act helped usher in for VA loans.

Conforming Vs. Jumbo Loans

In previous situations, veterans or military members who lived in higher-value areas faced some challenges due to county-specific conforming loan limits. However, the 2019 act we discussed above – which went into effect in 2020 – provides relief for this restriction. Now, veterans can obtain no-down payment VA-backed loans no matter where the home is and no matter whether the home exceeds conforming loan limits in the area.

For more on the recent changes that improved borrowing power for veterans and military members under the VA loan program, or to learn about any of our mortgage loan services, speak to the staff at Altius Mortgage today.