# Maximum Loan Amount by jolinmilioncherie

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```									Maximum Loan Amount
What is VA’s maximum
loan amount?
a. \$144,000
b. \$417,000
c. \$325,000
d. None of the above

VA guaranteed loans do not have a maximum
dollar amount. However, there are some
limitations to loan size…
Calculating Maximum
Purchase Loan
Lesser of purchase price or reasonable value
+
Up to \$6,000 Energy Efficient Improvements
+
VA Funding Fee
Calculating Maximum
Construction Refinance
Lesser of reasonable value or sum of outstanding
balance of the loan plus allowable discounts
+
Up to \$6,000 Energy Efficient Improvements

+
VA Funding Fee
Calculating Maximum
Installment Land Sales Contract
Lesser of reasonable value or sum of outstanding
balance of the loan plus allowable discounts
+
Up to \$6,000 Energy Efficient Improvements

+
VA Funding Fee
Calculating Maximum
Loan assumed by veteran at an interest
rate higher than the proposed refinance

Lesser of reasonable value or sum of outstanding
balance of the loan plus allowable discounts
+
Up to \$6,000 Energy Efficient Improvements

+
VA Funding Fee
Calculating Maximum
Interest Rate Reduction Refinance Loan
(IRRRL)
Existing VA loan balance

+
Up to \$6,000 Energy Efficient Improvements
+
Allowable closing costs and up to 2% discount
+ Fee
VA Funding
Calculating Maximum
Cash-Out Refinance Loan
Up to 90% of the reasonable value

+
Up to \$6,000 Energy Efficient Improvements

+
VA Funding Fee
REMINDER!
• VA does not have a maximum dollar
amount for the VA-guaranteed loan.
– However, the lender generally needs a
25% guaranty from VA in order to sell the
loan on the secondary market.
– If you are unsure if you have a marketable
loan, speak to your company’s post closing
department or the investor.
Maximum Guaranty
Maximum Guaranty
Effective December 10, 2004, VA’s
maximum guaranty for certain loans in
excess of \$144,000 is 25% of the
Freddie Mac conforming loan limit.
Maximum Guaranty*
VA Maximum
Freddie Mac Loan Limit (2007)       Guaranty (25%
of loan value)

\$417,000   Continental US              \$104,250
\$625,500   US Virgin Islands           \$156,375

*For purchase, new construction and Interest Rate
Reduction Refinance Loans (IRRRL).
How does VA’s guaranty work?
Basic entitlement: \$36,000
\$36,000 X 4 = \$144,000
\$36,000 + \$68,250 = \$104,250
\$104,250 X 4 = \$417,000

*The “additional entitlement” is not available for cash-out
refinance loans. Only the basic entitlement may be used.
Notes:
•The maximum guaranty table is
located in Chapter 3, section 4a of
the VA Lenders Handbook
•The percentage amount of
guaranty is based on the loan
amount including the funding fee.*

*If included in loan amount.
“Remaining Entitlement”

*The lender is responsible for ensuring they have a marketable loan.
Calculating Remaining Entitlement
Remember, “bonus entitlement” is not available for cash-out refinances.
Base              Bonus               Total         Maximum Loan
Entitlement        Entitlement        Entitlement         with no
Available          Available*                           \$\$/Down

\$36,000 (Full         \$68,250           \$104,250           \$417,000
entitlement)

\$17,500            \$68,250            \$85,750           \$343,000

\$8,500            \$68,250            \$76,750           \$307,000

\$0              \$68,250            \$68,250           \$273,000

*Bonus entitlement is increased by 50% for loans in Alaska, Hawaii, Guam and the Virgin Islands.
Questions?
Contact your nearest VA Regional Loan Center
via telephone or e-mail.
Reference:
VA Lenders Handbook
Chapter 3
Sections 3 and 4
Thank you for your interest in
the VA Home Loan Program!