Understanding VA Loan Limits by Zip Code in 2023

Buying a home is an exciting endeavor especially for military service members and veterans who can utilize their VA benefits. One of the biggest advantages of VA loans is that they require no down payment or mortgage insurance. However, there are limits on how much you can borrow with a VA loan depending on the county where you’re buying. In this comprehensive guide we’ll explain everything you need to know about VA loan limits by zip code for 2023.

What Are VA Loan Limits?

VA loan limits are maximum loan amounts that the Department of Veterans Affairs will guarantee without requiring a down payment. These limits vary by county across the U.S. and are typically higher in more expensive housing markets.

For 2023, the standard VA loan limit for most counties is $726,200. However, limits go as high as $1,033,000 in select high-cost counties. There is no universal maximum VA loan amount, so with full entitlement you can qualify for any loan size. But for borrowers with partial entitlement, VA loan limits determine your no-down-payment buying power.

Why Do VA Loan Limits Vary by County?

VA loan limits are tied to conforming loan limits set by the Federal Housing Finance Agency (FHFA). The FHFA analyzes median home prices in counties across America and sets limits accordingly The higher home values in a given county, the higher the VA loan limit.

Some of the factors that influence home values in a county include:

• Job opportunities and economic growth
• Desirability of the area
• Supply and demand of housing
• Cost of living

Since real estate markets vary dramatically by region, it makes sense that VA would adjust loan limits to match. This allows veterans in high-cost areas to buy a suitable home without needing cash for a down payment.

How to Check VA Loan Limits by Zip Code

It’s easy to look up the VA loan limit for your zip code. Here are two options:

VA Loan Limit Calculator

Most lenders like Veterans United provide an online VA loan limit calculator where you simply enter your county or zip code to see the max loan amount for your area.

For example, if you enter a Beverly Hills zip code, you’ll see the limit is $1,033,000 for LA County. But enter a rural Texas zip, and you may see the $726,200 standard limit.

VA Loan Limit Tables

Another option is to consult a VA loan limit table that lists loan limits for each county in every state. Simply control + F to search for your county within your state’s section.

This allows you to see the exact limit without needing to enter your zip. However, a calculator is faster if you already know your zip code.

How VA Loan Limits Impact Your Buying Power

VA entitlement determines how much of your loan the VA will guarantee. For most veterans, this is 25% of the total loan amount. So if you want to buy a home priced above your county loan limit, you’ll need to pay at least 25% of the difference as a down payment.

Let’s look at a quick example:

• You want to buy a $900k home
• Your zip code has a $726,200 limit
• You have full VA entitlement

Here’s how it works:

• 25% of $726,200 is $181,550 entitlement
• $181,550 x 4 = $726,200 max loan amount
• $900k (purchase price) – $726,200 (max loan) = $173,800 gap
• $173,800 (gap) x 25% = $43,450 required down payment

So in this case, you’d need $43,450 as a down payment to buy the $900,000 home with a VA loan. This demonstrates how VA loan limits affect your no-down-payment buying power if you don’t have full entitlement.

Tips for Finding a Home Within Your Limit

Here are some tips for house hunting within your means using VA financing:

• Get pre-approved – confirm your exact loan limit and entitlement
• Only search homes priced under your limit
• Expand your zip code search if nearby areas have higher limits
• Consider a lower-priced home or townhome
• Buy a home below your limit and remodel over time
• Wait to buy until you have a larger down payment

While VA loan limits are restrictive for some, they also allow veterans to buy a nice home with no down payment in many areas. Setting a realistic budget based on your exact loan limit makes the home buying process smoother.

The Takeaway

VA loan limits vary by county and determine how much veterans with partial entitlement can borrow without a down payment. It’s simple to look up loan limits by zip code using online calculators and tables. While limits are higher in costly areas, they make VA financing possible for all veterans across the country. Understanding your county’s limit helps set expectations for buying power when using your hard-earned VA home loan benefit.