The VA loan program is one of the most significant benefits available to Veterans, active-duty service members, and their eligible surviving spouses. This program offers exceptional advantages for purchasing homes, including no down payment or mortgage insurance premium requirements. Still, not all Veterans know that the VA loan benefits extend to high-value homes exceeding $766,550.
Understanding VA Loan Limits and Entitlements
Traditionally, VA loans did not have maximum limits, but county-specific conforming loan limits impacted the amount the VA would guarantee without a down payment. In areas where the home prices exceeded these limits, Veterans typically had to pay 25% of the difference between the home price and the loan limit. Recent changes in legislation have expanded benefits, providing more Veterans the opportunity to purchase higher-value homes with no down payment.
How to Qualify for $0 Down on Loans Above $766,550
Qualifying for a VA loan above $766,550 with zero down is straightforward, provided you meet specific criteria:
Full Entitlement: Veterans with full entitlement are not restricted by loan limits. Those who have yet to use their entitlement or had it fully restored may qualify for a VA loan above $766,550 without needing a down payment.
Restored Entitlement: Veterans who have utilized their entitlement previously may seek to have it restored if they have repaid their VA loan in full. Restoration allows them to borrow again with the same benefits, potentially including zero down on high-value properties.
Joint Loans: For Veterans considering purchasing a home with others, the VA may still guarantee a portion of the loan. This arrangement may enable the combination of VA loan benefits with other financing options to purchase a high-value home without a down payment.
VA Loan Benefits
Guaranteed by the U.S. Department of Veterans Affairs, VA Loans are designed to help those who have served in the military and their eligible surviving spouses to obtain homeownership with more flexible and favorable terms.
In addition to no down payment and no mortgage insurance premium requirements, VA loans offer several other unique benefits and features.
· Lower origination fees, appraisal fees, and closing costs.
· Purchase and refinance for primary homes.
· No prepayment penalties.
· Variety of eligible property types (single-family, townhomes, VA-approved condos, etc.).
· Available for qualified first-time and repeat homebuyers.
· 580 minimum credit score; 620 minimum credit score for loan amounts more than $766,550.
· At least 41% Debt-to-Income (DTI) ratio.
· The seller can pay VA non-allowable fees up to 4% of the loan amount.
· Two-year waiting period after foreclosure or bankruptcy after discharge.
· Some states may offer additional options for extra affordability.
VA Loan Eligibility
VA loans require that the homeowner lives in the home as their primary residence. A valid Certificate of Eligibility (COE) must be presented at the time of application. The certificate includes military eligibility, length of service or service commitment, duty status, and character of service.
VA Funding Fee
While there is no down payment requirement for a VA loan, they require a one-time funding fee to cover administrative or processing costs, much lower than a traditional down payment.
· 2.15% – for first-time use of the program with no down payment
· 1.5% – with a 5% or more down payment
· 1.25% – with more than 10% down payment
VA loans may make purchasing high-value homes more accessible for Veterans, active-duty service members, and their eligible surviving spouses. If you’re looking to buy a home and the price exceeds $766,550, consider leveraging your VA loan benefits; you may qualify for a zero-down payment.
If you’re ready to explore how you can use a VA loan to purchase your next home, contact Supreme Lending today! Our experts are here to help you maximize your benefits and guide you through securing your next home.