As a qualified veteran or current military member, using a VA loan to finance your home purchase is one of the smartest decisions you can make. VA home loans allow you to buy a house without having to make large down payments or deal with comparatively high interest rates associated with other types of mortgages.
However, if you choose to use this type of loan to finance your new house, you need to understand the current loan limits in place to make the best decision for your family and your finances. Those loan limits can change from year to year.
Here’s what you can expect for 2021.
Home prices are on the rise with more buyers looking for properties. This means the old limits aren’t large enough to keep up with the changing real estate market. The current limit for VA home loans is higher than the limit from 2020 and years past. For a single-unit property (think standalone house), the limit is $548,250 in most areas. For localities with higher costs of living and higher median home prices like Hawaii and Alaska, the limit increases to $822,375.
This means that you’ll be able to finance a home purchase with a sale price up to that limit without issue as long as your finances and income support your minimum monthly payments. If you find a home that’s priced higher than the loan limit, all you’ll need to do is provide a down payment to come up with the difference. Keep in mind that you can also use a conventional mortgage instead. Just make sure it fits your needs and offers you the best deal.
The Increase Applies to All Types of Properties
Since you can use VA home loans to finance the purchase of multi-family buildings as long as you’re planning on living in one of the units, it should come as no surprise that the limits for those multi-family property purchases are going up as well. In 2021, the limit for a duplex or two-unit property increases to $702,000. For a three-unit property, it increases to $848,500. And for a four-unit property $1,054,500.
Ready to Buy a House?
If you’re considering using VA home loans to finance a home purchase, make sure you’re working with the right lender. At Mortgage Solutions Financial, our team will help you find the best loan for your needs whether you’re looking at a conventional mortgage, exploring FHA loans, or applying for a VA loan.