U.S. Department of Veterans Affairs released its 2013 VA loan limits effective New Year’s Day. Though Federal Housing Finance Administration (FHFA) shows increased median house prices, VA loan limits show little change.
VA loan limits have been released for 2013 and are effective January 1 of the New Year. The Department publishes its annual loan limits based on the FHFA median house prices. The Q3 report shows prices rose up 1.1% from last quarter, with an appreciation of 4.04% from Q3 2011.
Based on home price data, most veterans won’t see much change in their VA loan limits in 2013. The majority of U.S. counties will remain at $417,000. However, certain high-cost counties with higher limits may have slight changes from 2012 to 2013. Generally, the high-cost limits are close to those of the latter half of 2012 after new laws restored the calculation method for bigger limits. The adjustment provides qualified veterans in certain high-cost military communities, like Prince William, Virginia for instance, the possibility of buying homes priced in line with locally inflated real estate markets. The VA will use the restored method through 2014.
Generally, VA loan limits for 2013 change slightly if at all from last year. For example, Alaska VA loan limits stay at $625,500. However, almost all of California, New Jersey and New York high-cost areas are down. Hawaii, Guam, and U.S. Virgin Islands stay the same for the most part except for Honolulu and St. John which have small adjustments from last year. Other states with changes up or down include Colorado, Massachusetts, Maryland, Utah, Virginia, Washington, West Virginia and Wyoming. Incidentally, all Utah and West Virginia high-cost counties are up, indicating house price increases in those areas. New to the VA loan limit list this year is Mono, California coming in at $437,500. Off the list completely for 2013 are Blaine, Idaho, Bristol, Massachusetts, Lancaster, Virginia and all of last year’s high-cost counties in Rhode Island. Loan limits is these counties fell to $417,000. VA still guarantees loans up to $1 million or more in parts of Colorado and Massachusetts, but no longer in California. The five counties there that had million-dollar limits last year fall just short in 2013.
If a loan limit decreases in 2013 for any county, the VA will guarantee the 2012 higher limit with proof of pre-approval such as a sales contract or a Uniform Residential Loan Application (URLA) executed before the New Year.
The VA publishes its VA loan limits annually. Only the names of counties with limits higher than $417,000 appear on the list. The list can vary from year to year as real estate markets rise and fall. Since 2006, home price indices have been reporting decreases. However, the consistent increases reported in 2012 by the FHFA may be a sign that some housing markets are recovering.
Veterans First Mortgage® VA Purchase Loan Manager, Tim Lewis, says, “We watch changes in the housing market closely. Annual VA loan limits usually follow market fluctuations.” Lewis goes on to say, “Many current homeowners who have been underwater in their mortgages would like to see their values go up.”
The “limit” discussed in this article isn’t a limit per se on how much a qualified veteran can borrower using the VA home loan program, rather, VA loan limits show the maximum amount for which the government will provide its guarantee. Loans over the limit will likely require a down payment to secure the overage.
To learn more about VA loan limits in your area, click here.
Veterans First is a trade name of Wintrust Mortgage, a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank. I NMLS# 449042 I Equal Housing Lender