VA Loan Limits in Miami Fort Lauderdale Florida
VA Loan Limits
VA does not set a cap on how much you can borrow to finance your home. However, there are limits in Miami Fort Lauderdale Florida on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you. The loan limits in Miami Fort Lauderdale Florida are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These loan limits in Miami Fort Lauderdale Florida vary by the county since the value of a house depends in part on its location. VA Loan Limits in Miami Fort Lauderdale Florida
The basic entitlement available to each eligible Veteran is $36,000. Lenders will generally loan up to 4 times a Veteran’s available entitlement without a down payment, provided the Veteran is income and credit qualified and the property appraises for the asking price.
2017 VA Loan Limits in Miami Fort Lauderdale Florida Increase to $424,100
Buying a home in 2017? You’ll want to know your VA loan limits. Look them up fast here and find the maximum loan the VA will guarantee without a down payment in your area.
VA LOAN LIMITS BASICS
New 2017 VA loan limits in Miami Fort Lauderdale Florida are effective January 1 – December 31. The baseline limits have increased for the first time in a decade―up to $424,100 from $417,000 in most areas. In some places, where homes are more expensive, limits in Miami Fort Lauderdale Florida are higher.
First, let’s clarify what loan limits in Miami Fort Lauderdale Florida are not. VA loan limits in Miami Fort Lauderdale Florida are not a cap on the amount you can borrow with a VA loan. A limit is simply a cap on the amount the VA is willing to guarantee. Qualified Veterans can use their home loan benefits to buy a home even if it exceeds the limit, which we will discuss later.
Generally, the VA is willing to back up to 25 percent of your loan within the limit. This is known as the VA Guaranty. The guaranty secures enough of the loan for approved lenders so that they don’t have to ask you to make a down payment or pay a monthly mortgage insurance premium (MMIP). The VA does charge most borrowers a funding fee to offset the cost of its guaranty. Regardless, the lack of down payment and MMIP can save significant cash out-of-pocket compared to other loan programs.
HIGH-COST CEILING RAISED TO $636,150
A high-cost area is called such if its median home value is 115 percent over the baseline loan limit. Limits in Miami Fort Lauderdale Florida in these areas are set to the median home value. In high-cost areas, the loan limits can exceed the baseline. However, there is a ceiling.
In the 48 contiguous states, the high-cost ceiling is $636,150. Special legislation exists for Alaska, Hawaii, Guam and the U.S. Virgin Islands where loan limits in Miami Fort Lauderdale Florida may exceed $636,150. For example, Honolulu has loan limits of $721,050.
Places like Key West, FL, and Virginia Beach, VA, and Honolulu, HI, have homes priced well over the limits in many popular neighborhoods. Limits in Miami Fort Lauderdale Florida are specific to each county. They are tied to median home prices. It’s very easy to find homes exceeding the limits in some of the most expensive housing communities.
VA LOAN OVER COUNTY LIMITS
In San Francisco, it costs $1,100,000 for an average home. This is $463,850 over the ceiling. So, if you can qualify, and want a VA loan that exceeds the county limit, you’ll need to make a down payment.
Even in a case such as this, these loan benefits can be a significant advantage to a Veteran. The down payments for loans over the limits are factored only on the portion of the limits – a small fraction of what could be required for conventional loans. If you do make a down payment on a VA loan, you can expect it to be 25% of only the amount that is not backed by the government. The money saved on down payments for eligible borrowers can amount to tens of thousands.
WHAT DETERMINES LOAN LIMITS?
To get an idea how loan limits in Miami Fort Lauderdale Florida might change each year, home prices can provide a clue. The Federal Housing Finance Administration (FHFA) publishes a Home Price Index (HPI) each year. This federal agency uses the HPI and the HERA formula, which stands for Housing and Economic Recovery Act of 2008, to calculate loan limits.
The average home price in the third quarter of 2016 was 1.7 percent above the value for the third quarter of 2007 (pre-crisis), per the FHFA report. It’s no coincidence that for 2017, the baseline loan limits increased by the same amount.
MORE ABOUT HOME PRICES
Home prices have been on a steady rise since the housing crash in 2008, according to the FHFA. In the third quarter of 2016, all but one state saw home prices increase from a year ago. Here are some other findings according to the 2016 Q3 HPI:
Five states with the most growth were Florida, Oregon, Washington, Colorado, and Utah.
The metro area with the largest increase was Tacoma-Lakewood, WA (MSAD), up 12.9 percent.
The metro area with weakest prices was New Haven-Milford, CT, down 1.7 percent.
The region with the strongest growth was the South Atlantic, up 1.8 percent quarterly and 7.1 percent annually.
The region with the weakest growth was New England, up 0.8 percent quarterly.
ARE NEW LIMITS IN MIAMI FORT LAUDERDALE FLORIDA HIGH ENOUGH?
Figures from the VA may support the idea that flexible loan limits in Miami Fort Lauderdale Florida may be best for Veterans who live in high-cost housing markets. In February of 2016, VA Loan Director went before Congress and reported an estimated 15,000 Veterans wanted to buy homes priced over the limits in 2015.
It may be true that many Veterans aren’t reaping the full rewards of zero-down-payment home loan benefits as they were intended.
He went on to tell lawmakers that about 90 percent of all VA mortgages have been obtained without a down payment since the program started back in 1944. However, the percentage of zero-down-payment purchases has been dropping year after year, according to VA Annual Benefits Reports.
For example, in San Jose, the average home costs about $1,000,000. The 2017 loan limits for a VA guarantee is $636,150. That leaves the Veteran with $363,850 to secure with cash (25 percent is typically required). Hypothetically, a Veteran would need to pay $90,962 in a cash down payment just to buy an average home.
NEW BILL CALLS FOR A FLEXIBLE VA GUARANTY
Members of Congress have proposed doing away with loan limits in Miami Fort Lauderdale Florida for Veterans. Their proposal is a flexible VA guaranty based on a where the Veteran wants to buy, how much entitlement is available, and ability to pay.
Flexible VA loan limits in Miami Fort Lauderdale Florida may make it possible for more Veterans to take advantage of the zero-down-payment feature of the benefit. It wouldn’t change the lender’s responsibility to prove the Veteran can pay back the loan. This change in limits in Miami Fort Lauderdale Florida would likely force lenders to redefine their own guidelines for high-cost loans.
VA LOAN LIMITS CALCULATOR
Are you curious about your loan limits? Look yours up using the VA loan limits calculator.
Are you a veteran? Thank you for your service! Are you looking to buy a home? Congratulations! Read on for the low-down on VA loan limits.
What’s my VA loan limit?
That depends on. VA loan limits in Miami Fort Lauderdale Florida vary by county. In fact, within a single state, the limits could differ by as much as $500,000 between counties. Limits in Miami Fort Lauderdale Florida are higher in wealthier counties where the cost of living is higher. In most places around the country, the current limits are $424,100. That applies to loans closed on or after January 1, 2017. But limits in Miami Fort Lauderdale Florida can top a million dollars in the most expensive counties.
What if I want to buy a house that’s above the maximum VA loan in my county?
If you’ve fallen in love with a house that tops the maximum in your area, don’t despair. When you look up the VA loan limits in Miami Fort Lauderdale Florida in your county, the number you see won’t tell you the maximum value of the home you can get a VA loan. Instead, it tells you the limits of what you can get if you put $0 down.
If you have some money for a down payment, though, these limits in Miami Fort Lauderdale Florida might not apply to you. Got some money saved and want to buy a house that’s over the VA loan limits? What you need is a jumbo loan.
What is a jumbo loan?
A jumbo loan lets you finance the difference between the VA loan limits in your county and the value of the home that you want to buy. Say you want a house that’s $500,000, but the VA loan limits in your county are only $424,100. How will you finance that extra $75,900? With a jumbo loan. VA Loan Limits in Miami Fort Lauderdale Florida
To use a VA loan to finance this example home — or any home that’s over the local VA loan limits — you’ll need to come up with 25% of the difference between the home price and the loan limit. So, $75,900 divided by 4 is $18,975. You would have to make a $18,975 down payment to finance your $500,000 home.
That may sound like a lot of money (and it is!) but remember that with a conventional loan you’d likely have to put down 20% of the full home value, meaning a $100,000 down payment for our example home. Even with the 25% down payment requirement for jumbo loans, the VA loan is still a great deal.
What’s this “full entitlement” business I keep hearing about?
“Full entitlement” refers to the maximum possible amount of VA loan eligibility for a veteran or surviving spouse. The limits in Miami Fort Lauderdale Florida we publish at Smart Asset are the VA loan limits in Miami Fort Lauderdale Florida for applicants with full entitlement.
If you already have a VA loan, you’ve eaten into your entitlement. You might still have “remaining entitlement” that you could apply for another VA loan, though. In that case, a lender would likely approve you for a loan equal to four times the value of your remaining entitlement. VA Loan Limits in Miami Fort Lauderdale Florida
Do VA loans come with fees?
Yes, indeed. VA loans come with what’s called a funding fee, which helps keep the VA loan system afloat. The funding fee is expressed as a percentage of the loan value. As of 2017, it’s 2.15% for regular military officers and 2.4% of the reserves and National Guard on 0%-down payment loans to first-time veteran borrowers. For veterans accessing a VA loan for the second time, the fee for a 0%-down loan is 3.3%. Veterans who put a down payment on their homes will pay a smaller percentage of funding fees.
Certain people are eligible to have the VA loan funding fee waived altogether. These include veterans receiving VA compensation for service-related disabilities, veterans who would be receiving compensation for service-related disabilities if they weren’t already receiving retirement pay and surviving spouses of veterans who died in service or from service-connected disabilities.
If you pay the VA funding fee and then later discover you’re entitled to retroactive disability benefits going back to a date before your loan closed, don’t panic. Contact the VA and they’ll work on getting your fee refunded.
Is there a minimum credit score for a VA loan?
It sounds weird, but the VA doesn’t actually act as the lender for VA loans. Instead, they back the loans that conventional lenders like banks and credit unions supply to veterans. So although the VA itself doesn’t have minimum credit requirements for a VA loan, the lender you work with on financing your home likely will have a minimum credit score in mind. Usually, this hovers around the 620 mark — considerably lower than with a conventional loan.
Are there special privileges for disabled veteran homeowners?
Aside from the fee exemption we mentioned earlier, there are other provisions for disabled veteran homebuyers. The VA offers grants to disabled veterans to fund accessibility modifications to homes. Many states also give property tax exemptions to disabled veterans.
What if I get stationed in another city and have to move?
Not to worry. Although VA loans are limited to primary residences and cannot be used for the purpose of financing a rental or investment property, you can rent out your home if you have to move for service-related reasons.
Do VA loans come with income requirements?
Not exactly. The VA doesn’t care what you make overall, but they do care that you have enough income to cover your housing costs plus the necessities. That’s where the VA loan residual income requirement comes in. The residual income requirement is the VA’s way of making sure you don’t max out your budget on housing costs. When you get a VA loan, you’ll have to prove that you have enough money left over each month after your bills to pay for basics like food and gas. VA Loan Limits in Miami Fort Lauderdale Florida VA Loan Limits in Miami Fort Lauderdale Florida
Residual income requirements are calculated based on a few factors: the size of your VA loan, the size of your family, your debt-to-income ratio and your location. A single veteran in an inexpensive part of the country who took out a modest loan would need to provide proof of less money in residual income than a big family living someplace fancy.
Will my VA loan end up in the secondary mortgage market?
Probably. Most VA loans end up being packaged up by lenders and passed to Ginnie Mae, a government-owned corporation that allows individuals and pension funds to invest in the secondary mortgage market. Ginnie Mae guarantees mortgage-backed securities for government-backed mortgages but doesn’t buy them or sell the mortgage-backed securities. Ginnie Mae securities are backed by the full faith and credit of the U.S. government.
Can I use a VA loan to buy a bungalow in Bali?
Alas, no. VA loans are only available for properties in the United States or U.S. territories and possessions. Puerto Rico, Virgin Islands, American Samoa, Guam and the Northern Mariana Islands are all fair game if you’re looking to buy a home off the beaten path.
Does the VA limit the quality of homes that qualify for VA loans?
This is the other kind of VA loan limit, the kind that doesn’t have to do with dollars and cents. The VA likes to make sure that the homes people finance with their loans aren’t too run down. Homes financed with a VA loan need to be safe, structurally sound and sanitary. You’ll be hard-pressed to get a VA loan on a tear-down, in other words.
And now for some final words of advice.
If you decide to work with a realtor, it’s a good idea to find one who is familiar with VA loans. As we’ve just covered, VA loans come with their own set of limits in Miami Fort Lauderdale Florida and complications and working with a real estate agent who doesn’t know the system can make the home buying process more of a headache. VA Loan Limits in Miami Fort Lauderdale Florida
Cultivate your credit. What do we mean by that? First, know what your credit score is now and then work on making your credit as good as it can be. That means paying off credit card bills in full every month you can afford to do so. And don’t charge big purchases until after you close on your home to avoid setting off any alarm bells for your lender.
Don’t be afraid to ask for help. We’re not saying it’s as tough as basic training, but navigating the home buying process can be pretty tough. Reach out to the VA and other veterans’ groups if you need to. VA Loan Limits in Miami Fort Lauderdale Florida