Maximum Loan Amount

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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
            Alaska, Hawaii, Guam,
 $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
         Additional entitlement*: $68,250
         $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!




We appreciate your support!

				
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