he new FHA loan limits go into effect in October 2011 and remain in effect for the remainder of the year unless Congress takes action to change those limits. The question the minds of some VA home loan applicants is a reasonable one–will the Department of Veterans Affairs follow suit? Fortunately for those looking for a VA home loan in the affected counties, the Department of Veterans Affairs will not, at the time of this writing, change VA loan limits for the rest of the year. There was an official statement issued to that effect on the VA official site; “The maximum guaranty for VA guaranteed loans closed October 1, 2011 through December 31, 2011 will remain unchanged. The Veterans’ Benefits Improvement Act of 2008 provided a temporary increase in VA loan limits for loans closed January 1, 2009 through December 31, 2011.
Because of this legislation, VA loan limits will remain the same for the remainder of the calendar year.” The announcement closed by reminding VA loan applicants that the Department of Veterans Affairs does not have a “maximum loan amount”. While it’s true that borrowers do have limits to what they can borrow based on a combination of factors, the VA does not issue a single dollar amount that the borrower may apply for. According to the VA official site, the phrase “loan limit” refers to “the maximum loan a lender could make and still receive a 25% guaranty from VA, assuming the veteran has full entitlement.” VA home loan applicants should know that current VA loan limits for the year 2011 are not necessarily locked in for the year 2012. VA loan limits by county may increase or decrease based on market conditions and other variables. Any changes to the VA loan limit are announced by the VA prior to those changes going into effect for the new year. Source: Department of Veterans Affairs