Increased VA Loan Limits to Help CA Veterans

The Veterans Administrations recently announced a 2012 mid-year increase to the VA loan limits, pushing the Orange County, CA limit to $675,000. This new limit is good through the end of 2012. The previous limit was $621,000. This limit is also good for Los Angeles county and is for 100% financing.

$0 Down to $675,000 in Orange County, CA

$675,000 will buy a nice in in Orange County. Considering no down payment is required, there is no monthly mortgage insurance, and the VA 30 year fixed interest rate tends to be very low, the VA program is an excellent way for an eligible Veteran to buy a home. But it doesn’t need to be a $0 down program. And the maximum loan amount is not $675,000. That is just the $0 down loan limit. Some VA lenders will actually fund $1,500,000 VA loans.  The VA loan limits vary by county. While the 2012 VA loan limits in California do vary by county, the higher priced counties in California did get a boost.

If a Veteran is buying a home for more than the Zero Down loan limit, then a down payment equal to 25% of the difference between the purchase price and $0 down limit is required. For example, if a Veteran is buying a home in Irvine, CA for $775,000, then a down payment of $25,000 is required. (25% of $775,000 – $675,000 = $25,000).

A VA loan is also a great option for a refinance out of a Conventional loan. For those homeowners who have lost equity in their home, but are not “upside down”, VA will allow financing up to 100% of the properties value, up to the Orange County 100% limit.  Considering that the Conventional loan limit is $625,500, and 10% equity is needed for a Conventional refinance (with Mortgage Insurance), VA offers a great option. The same formula for a Jumbo VA loan above applies to a refinance. Veterans in high end cities like Newport Beach are finding that a VA loan is a great option for a refinance for loans ranging from $700,000 to $1,500,000 because of the low 30 year fixed interest rates.

While the HARP 2.0, Home Affordable Refinance Program, is available to those have no equity or are upside down, VA should definitely be considered as an option for those who are eligible. The first step in determining if a VA loan is your best option is to contact a local Orange County VA loan specialist who can prepare custom loan scenarios.

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