Calculating the maximum VA loan amount in Tampa Bay does not have to be a chore. When a U.S. Veteran receives his or her Certificate of Eligibility if they have a honorable discharge, full VA benefits and have not previously used their entitlement to purchase a home with VA financing, chances are they will have a basic entitlement of $36,000.
Unless you are familiar with VA financing you may or may not be aware that VA multiplies the entitlement by 4 to reach a basic entitlement of ($36,000 X 4) = $144,000. For Veterans purchasing a home in excess of $144,000 VA will offer a bonus entitlement of $68,250 for home purchases in the Tampa Bay area. So the maximum VA loan amount with 100% financing is ($36,000 + $68,250 = $104,250) ($104,250 X 4) = $417,000.
Should the Veteran wish to purchase a home greater than $417,000 and obtain VA financing. They will be required to make a down payment of 25% of the difference. If the sales price is $500,000 then the Veteran's sales prices is $83,000 greater than the maximum 100% loan amount of $417,000 in the Tampa Bay area so they will be required to make a down payment of $83,000 / 4 or $20,750 and will have a base loan amount of $479,250 on a $500,000 purchase. Since VA guarantees the top 25% of the loan amount any loan in excess of $417,000 will require a 25% down payment from the Veteran.
Should the Veteran have "Partial Entitlement" due to owning another VA financed home; a prior foreclosure; or a default as a result of a VA loan prior to March 1, 1988 when VA allowed other borrower's to assume existing VA loans or "non-qualifying" VA assumptions they can still apply for a VA home loan.
Veteran's with partial entitlement can multiply their basic entitlement by 4 to reach their maximum VA loan amount below $144,000. So if a Veteran has a remaining entitlement of $20,000 then their maximum 100% VA loan including the VA funding fee (VA's upfront mortgage insurance) is ($20,000 X 4 =) $80,000. If the Veteran wishes to purchase a home between $80,000 - $144,000 then they VA will require a down payment. For example if the home is selling for $120,000 then take the sales price of $120,000 X 75% + the remaining entitlement of $20,000 to establish a maximum mortgage amount of $110,000 including the VA funding fee.
If that same Veteran purchases a home over $144,000 then the bonus eligibility of $68,250 would kick in and the Veteran would qualify for a 100% loan of $68,250 (bonus entitlement) + $20,000 (remaining eligibility = $88,250 X 4 = $353,000.
So bonus entitlement may make the difference between whether a Veteran borrower will receive 100% financing or not. Should you need assistance with a VA home loan, please contact Mike Baralt at 727-797-0600 or firstname.lastname@example.org should you need assistance in calculating a maximum VA loan amount in the Tampa Bay area.
McCaughan Mortgage Company is a family owned and operated Florida mortgage lender since 1953 with offices in Clearwater, Fort Myers and Miami.