$700,000 VA Loan Limit in Orange County, CA Remains through December 2011

The 100% VA financing loan limit in Orange County, CA has been $700,000 since January 1, 2011. While Conforming and FHA loan limits will be dropping from $729,750 down to $625,500, the high VA loan limit will remain in place for the last three months of 2011. If what is happening with Conventional and FHA limits is any indication, there shouldn’t be any surprise if the VA limit also drops in 2012.

The 2011 California VA Loan Limit has Benefited Orange County Veterans

Prior to 2009, the VA loan limit in Orange County was $417,000. But in late 2008, the Veteran’s Benefits Improvement ACT provided a temporary increase to the 100% financing limits for loans closed from January 1, 2009 through December 31, 2011. Because of the collapse of the Mortgage Backed Securities market, VA, along with FHA and Fannie/Freddie increased the loan limits to fill the void left by the lack of “Jumbo” financing. The $700,000 limit in Orange County has allowed Veterans and Active Duty military to not only purchase luxury Orange County homes with zero down payment, but also refinance out of Conventional loans at a “high loan to value” without having to pay Mortgage Insurance. Also, VA offers very competitive 30 year fixed rates.

Three More Months to Take Advantage of High VA Loan Limits

Since there is no telling what will happen with VA loan limits in 2012, retired and active military personnel should act quickly if they are planning to purchase or refinance a home valued at over $417,000.

VA does not actually have a maximum loan limit. But VA does guaranty 25% of the loan up to a $700,000 amount in Orange and Los Angeles counties. If the purchase price is greater than the limit, in this case $700,000, then the Veteran needs to have a down payment equal to 25% of the difference between $700,000 and the purchase price. As an example, let’s say Johnny Gunner wants to purchase a home in Mission Viejo, CA for $800,000. He would need a down payment of $25,000 (25% of $800,000 less $700,000). the VA loan would be $775,000, plus the Funding Fee, which is financed into the loan. Still a great deal.

The first step is to contact a local Orange County, CA  VA Lender. The VA lender should be able to provide customized loan scenarios breaking down the purchase price, loan amount, payment, and amount needed to close (if any). The VA lender can also quickly retrieve the Certificate of Eligibility and then work on a VA Loan PreApproval, an important step prior to making an offer on a home.