VA Loan Entitlement and Loan Limits

If you’re a veteran or an active duty service member, and you’re familiar with your VA Loan benefits, that’s great! According to the Department of Veterans Affairs, a third of veterans don’t know about their VA home loan advantages, so that’s a good start.

But just because you know you have access to the VA Loan doesn’t necessarily mean you understand everything about this entitlement.

The “entitlement” part can be confusing for many VA homebuyers. On each VA Loan, the government provides a financial guaranty. That means that if the homebuyer defaults on his or her loan, the government will pay the lender back. Usually the guaranty covers 25 percent. This guaranty in dollars is the entitlement a VA homebuyer has, that amount reflects how much the homebuyer can borrow before a down payment.

Basic entitlement is typically $36,000, but there’s also a form of bonus entitlement in the amount of $70,025. When the basic and bonus entitlements are added together, they equate to $106,025 – the max VA Loan entitlement a homebuyer can have. Homebuyers in more expensive areas of the country – high-cost counties – have even larger entitlements. That’s where VA Loan limits come in.

VA Loan limits exist so VA homebuyers know just how much they can afford before making a down payment. In these cases, the down payment must be at least 25 percent of the difference between the home purchase price and the entitlement cap.

Learn more about the universal VA home loan program.