VA Loan Limit Changes in 2025

VA Loan Limits Are Changing in 2025

Right now, it’s estimated that VA loan limits are going to see a nice bump up from where they currently are. My name is Evan Kaufman, your VA loan originator, here to help explain these changes.

Current Loan Limits (2024)

Currently, in 2024, VA loan limits are set at $766,550 across the board, with some counties offering higher limits, bumping up into the $1.1 million range in high-cost-of-living areas.

Anticipated Changes in 2025

In 2025, it has been announced that the base loan limit across the board will increase to $806,500, which is a significant jump from the current $766,550. This represents a little over a $40,000 increase in purchasing power for VA County loan limits. In high-cost areas, such as Hawaii and Alaska, the limits are expected to rise even higher, potentially exceeding $1.23 million.

No County Loan Limits for Some Borrowers

It’s important to note that if you do not have an active VA loan, there are no county loan limits. This change was introduced in 2020 and means that borrowers with no active VA loans can purchase homes, even in the $1–3 million range, with 0% down.

For example:

• If you’ve never used a VA loan before, or if you’ve used one previously but have sold that property and have no outstanding VA loans on your Certificate of Eligibility (COE), the county loan limits will not apply to you.
• To learn more about this, check out our videos on Certificates of Eligibility or our VA Loan Masterclass.

When County Loan Limits Apply

County loan limits apply if you already have an active VA loan and are looking to purchase another home using your VA benefits. Here’s how it works:

1. Existing Loan Example:

   • Suppose you previously purchased a home for $300,000, and this amount is reflected on your COE.
   • In 2024, the standard county loan limit is $766,550. To calculate your remaining eligibility, subtract $300,000 from $766,550:
     • $766,550 – $300,000 = $466,550.
   • This means you could purchase a home up to $466,550 with 0% down.

2. Going Beyond the Limit:

   • If you want to buy a home priced above $466,550, a down payment is required. The down payment equals 25% of the amount over the limit.
   • For instance, if the home price is $566,550, the amount over the limit is $100,000. You’d need to bring a $25,000 down payment (25% of $100,000).

3. 2025 Loan Limits Example:

   • With the increase to $806,500 in 2025, your remaining eligibility would be recalculated:
     • $806,500 – $300,000 = $505,500.
   • Now, you could purchase a home up to $505,500 with 0% down, increasing your purchasing power by $40,000 compared to 2024.

Why Are Limits Increasing?

The VA loan limit adjustments reflect rising home prices and updates from the VA Federal Administration. These changes provide greater purchasing power to eligible borrowers.