VA Loan Limits For 2011 Announced, San Diego County Limit Increased!

The Department of Veterans Affairs announced new loan limits for the VA Zero Down Payment Loan.  These limits apply to all VA loans closed January 1, 2011, through September 30, 2011.

The VA Loan Guaranty program does not set a maximum amount that an eligible veteran may borrow using a VA-guaranteed loan.  However, they do limit the amount that they will guaranty to 25% of the local VA limit. 

If an eligible veteran wishes to purchase a home priced higher than the local maximum limit, then that veteran would need to bring in a down payment to make up the difference between 25% of the local maximum (the guaranty) and 25% of the purchase price.  

Here is an example: The 2011 VA limit for real estate purchases in San Diego County is going to be $537,500.  If an eligible veteran with full entitlement purchases a home of equal or lesser value than $537,500 then no down payment will be required.  VA will guaranty up to 25% of the local limit ($537,500) which equals $134,375.

However, if that same veteran wishes to purchase a home priced at $550,000 then they would need to bring in the difference between 25% of the local limit and 25% of the purchase price.

• Maximum Guaranty Amount In San Diego County = 25% of $537,500 = $134,375
• 25% of Purchase Price $550,000 = $137,500
• Difference between $137,500 and $134,375 = $3,125

The required down payment in this example of $3,125 is less than 1%...not too shabby.  The greater the difference between the purchase price and the VA local limit, the greater the percentage down payment.

• Purchase price of $600,000 in San Diego County will require down payment of $15,625 which is only a 2.6% down payment
• Purchase price of $650,000 in San Diego County will require down payment of $28,125 which is only a 4.3% down payment
• Purchase price of $700,000 in San Diego County will require down payment of $40,625 which is only a 5.8% down payment

This is great news for active duty military and veterans alike looking to purchase San Diego real estate.  The 2010 limit was only $437,500...that is a $100,000 increase!  Over the years, I have specialized in VA loans and I am very excited about this news.

Kevin Kueneke, NMLS # 284800

Direct Lender, Mortgage Banker

Primary Residential Mortgage, Inc.

1000 Aviara Parkway, Suite 110 | Carlsbad | CA | 92011
Phone 760-500-1919 | Fax 619-419-2324

www.activerain.com/blogs/kkueneke | kkueneke@primeres.com

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