Thursday, August 4, 2011

2011 VA Loan Limits

Each year, the U.S. Department of Veterans Affairs (VA) announces its annual VA loan limits. On December 3, 2010 the VA published its 2011 home loan limits. The limits have little to do with the maximum amount a veteran can borrow. Rather, the limits are in place to calculate the maximum amount the VA will guarantee per home loan based on location. The 2011 limits are effective for VA home loans closed between January 1, 2011 and September 30, 2011.

As in 2010, most U.S. counties still have a VA loan limit of $417,000. Of course, there are some high-cost areas of the country where adjustment were made. Whenever changes are made to the limits, it means there has been a fluctuation in the real estate market for a particular county.

Generally speaking, most high-cost counties are seeing subtly higher VA loan limits for 2011. In counties where the limit is higher than $417,000, a qualified VA-eligible borrower with full entitlement may borrow up to the county limit with zero money down. With the appropriate cash to put down, a qualified VA-eligible borrower can certainly exceed the limit in any U.S. county.

In 2011, there are certain U.S. counties where the real estate market improved significantly from 2010. Worth mentioning are California, New Jersey, New York and Utah have some counties where loan limits increased. Orange, Sonoma, Santa Barbara, Alpine, Yolo and Monterey Counties in California each have bigger limits in 2011 than in 2010. New Jersey and New York have considerably higher limits for 2011 across both states, up from $681,250 to $735,000. The most noteworthy increase is in Utah where the three high-cost counties of 2010 (Salt Lake, Summit and Tooele) jumped nearly $100,000 from $516,250 to $612,500 for 2011.

As expected, as some counties experienced market improvements, others saw a decline in home values. These counties include: Sacramento, El Dorado and Placer Counties in California; Ouray and Hinsdale Counties in Colorado; and Greene County, Georgia. Counties in Virginia could have economists scratching their heads. While nearly 70 percent of the east coast state's counties are missing from the high-cost list for 2011, the counties that remain all have higher loan for 2011.

Almost every year, there are new counties on the VA loan limit list. Counties that "graduated" from average to high cost include: Boulder County, Colorado with a limit of $427,500; Blaine County, Idaho with a limit of $431,250; and, Barnstable County, Massachusetts with a slightly higher-than-average limit of $418,750.

VA loans are originated and funded by private lending companies and guaranteed by the U.S. Department of Veterans Affairs. Lenders must ultimately agree to the terms of each loan. For more information about 2011 VA loan limits can be obtained by contacting an experienced VA loan professional.

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