Maximum Loan Amount What is VA s maximum

Maximum Loan Amount

What is VA’s maximum loan amount? a. $144, 000 b. $417, 000 c. $325, 000 d. None of the above VA guaranteed loans do not have a maximum dollar amount. However, there are some limitations to loan size…

Calculating Maximum Purchase Loan Lesser of purchase price or reasonable value + Up to $6, 000 Energy Efficient Improvements + VA Funding Fee

Calculating Maximum Construction Refinance Lesser of reasonable value or sum of outstanding balance of the loan plus allowable discounts + Up to $6, 000 Energy Efficient Improvements + VA Funding Fee

Calculating Maximum Installment Land Sales Contract Lesser of reasonable value or sum of outstanding balance of the loan plus allowable discounts + Up to $6, 000 Energy Efficient Improvements + VA Funding Fee

Calculating Maximum Loan assumed by veteran at an interest rate higher than the proposed refinance Lesser of reasonable value or sum of outstanding balance of the loan plus allowable discounts + Up to $6, 000 Energy Efficient Improvements + VA Funding Fee

Calculating Maximum Interest Rate Reduction Refinance Loan (IRRRL) Existing VA loan balance + Up to $6, 000 Energy Efficient Improvements + Allowable closing costs and up to 2% discount + Fee VA Funding

Calculating Maximum Cash-Out Refinance Loan Up to 100% of the reasonable value + Up to $6, 000 Energy Efficient Improvements + VA Funding Fee

REMINDER! • VA does not have a maximum dollar amount for the VA-guaranteed loan. – However, the lender generally needs a 25% guaranty from VA in order to sell the loan on the secondary market. – If you are unsure if you have a marketable loan, speak to your company’s post closing department or the investor.

Maximum Guaranty

Maximum Guaranty Effective December 10, 2004, VA’s maximum guaranty for certain loans in excess of $144, 000 is 25% of the Freddie Mac conforming loan limit.

Maximum Guaranty* Freddie Mac Loan Limit (2007) VA Maximum Guaranty (25% of loan value) $417, 000 Continental US $104, 250 $625, 500 Alaska, Hawaii, Guam, US Virgin Islands $156, 375 *See www. homeloans. va. gov/new. htm for higher cost county loan limits for 2009.

How does VA’s guaranty work? Basic entitlement: $36, 000 X 4 = $144, 000 Additional entitlement*: $68, 250 $36, 000 + $68, 250 = $104, 250 X 4 = $417, 000 *Generally, the lender needs a 25% guaranty in order to sell the loan on the secondary market.

Notes: • The maximum guaranty table is located in Chapter 3, section 4 a of the VA Lenders Handbook • The percentage amount of guaranty is based on the loan amount including the funding fee. * *If included in loan amount.

“Remaining Entitlement” *The lender is responsible for ensuring they have a marketable loan.

Calculating Remaining Entitlement Base Entitlement Available Additional Entitlement Available* Total Entitlement Maximum Loan with no $$/Down $36, 000 (Full entitlement) $68, 250 $104, 250 $417, 000 $17, 500 $68, 250 $85, 750 $343, 000 $8, 500 $68, 250 $76, 750 $307, 000 $0 $68, 250 $273, 000 *Bonus entitlement is increased by 50% for loans in Alaska, Hawaii, Guam and the Virgin Islands.

Questions? Contact your nearest VA Regional Loan Center via telephone or e-mail.

Reference: VA Lenders Handbook Chapter 3 Sections 3 and 4

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