VA Loan Limits to Remain Unchanged in 2011

VA has announced they are keeping their existing loan amounts through the end of 2011 instead of reducing them, like conforming and FHA loan amounts are set to do. From VA's website:

The maximum guaranty for VA guaranteed loans closed October 1, 2011 through December 31, 2011 will remain unchanged.  The Veterans’ Benefits Improvement Act of 2008 provided a temporary increase in VA loan limits for loans closed January 1, 2009 through December 31, 2011. Because of this legislation, VA loan limits will remain the same for the remainder of the calendar year.  Please note that VA does not have a maximum loan amount.  Loan limit refers to the maximum loan a lender could make and still receive a 25% guaranty from VA, assuming the veteran has full entitlement.

Currently (and for the remainder of 2011) in King, Pierce and Snohomish County, qualified Veterans can have a loan amount of $500,000 and still have zero down payment. Loan amounts above $500,000 have a down payment of 25% of the difference between the sales price and loan amount.  You can read more about VA loan limits (VA Jumbos) in Washington state here.

If you're a Mortgage Porter subscriber, then you know that in just a matter of a couple weeks, we're going to see Conforming and FHA loan limits reduced (technically "rolled back") effective on October 1, 2011 (loans must be funded and sometimes, delivered prior to this date). Congress may still take action to keep the existing loan amounts through the end of this year, however I'm thinking that is unlikely.   Currently the loan limit for a single family home in the Seattle area for FHA and conforming loans is $567,500, it is set to be reduced to $506,000.  Loan amounts $506,001 and higher will be considered "jumbo" soon.

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