California VA Loan Limits for some high priced counties in California will be $679,650, which is welcome news for those counties where property values continue to rise. The highest Zero Down VA loan limit in California in 2017 was $636,150. An increase of over $40,000 for Zero Down financing is a big jump.
What the VA Loan Limit Increase Means for California Veterans
For a California Veteran purchasing a home for $679,650 in a county like Orange or Los Angeles, this means they will not need a down payment. Because VA does have the Jumbo VA Loan program, it is possible to get a VA loan above the 100% financing limit. If a Veteran purchased a home for $679,650 in 2017, they would have needed a down payment of $10,875 and a VA loan of $668,775. That was really a good deal. But now, even better, they will not need a down payment at all for a $679,650 purchase price. The Veteran can keep the $10,875 in their bank account, or use for paying closing costs.
100% Financing Limit Varies from County to County
The basic 100% VA loan limit will be $453,100 in 2018. The previous limit in 2017 was $424,100. For counties that are not considered “high cost”, such as San Bernardino and Riverside counties, $453,100 will be their limit. Other counties, like San Diego, will have increased limits compared to 2017 ($612,950 in 2017), which will now be $649,750.
VA Loans Above 100% Financing Limit = Jumbo VA Loan
The Jumbo VA loan is any VA loan that is above the 100% financing limit for the county they are in. For example, if a Veteran purchases a home in Riverside County for $473,100, where the 100% Loan Limit is $453,100, they would need a down payment of $5,000. Notice how I did not say they needed a down payment of $20,000. VA only requires a down payment equal to 25% of the difference between the 100% loan limit and the higher purchase price. This would be a Jumbo VA loan. That same loan amount in Orange County, CA would not be a Jumbo loan. A Jumbo VA loan in Orange County (or Los Angeles county) would occur if the purchase price were above $679,650. For example, if the purchase price was $699,650, then a down payment of $5,000 would be required. If the purchase price was $1,079,650, or $400,000 above the loan limit in Orange County, the down payment would be $100,000 (.25 * $400,000 difference = $100,000 down payment). The VA loan would be $979,650.
High Loan Limits will Help VA Loan Refinancing
The higher loan limits will also help Veterans who currently own homes and were looking to refinance to pull cash out. If their loan amount was limited by the 2017 loan limits, then the 2018 VA loan limit will help. VA allows cashout refinancing up to 100% of the property value when the loan amount is within the 100% financing limits.
How to Find Out What a VA Loan Looks to for You
So how do you find out what the numbers will look like for you. The first step is to contact a California VA loan specialist. A California VA Loan Officer is someone who specializes in VA financing. It is important to work with a specialist when learning about the VA loan program because it is different from other types of loan programs. The California VA Loan Officer should be able to prepare accurate custom loan scenarios that will give you a complete breakdown of the numbers, including the full payment (Principal, Interest, Taxes, and Insurance), closing costs, and prepaid expenses. A good Loan Officer should also be able to answer questions on the VA program and provide a custom video of your loan scenarios.
Authored by Tim Storm, a California Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. www.CaliforniaVALoanExpert.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.