What Is the VA Loan Limit and How Does It Work?
Understand how VA loan limits work, clarifying what they mean for your home purchase and how your eligibility impacts the maximum amount you can borrow.
VA loans offer a benefit for eligible service members, veterans, and surviving spouses seeking to purchase a home. These government-backed mortgages often allow for the purchase of a property without a down payment, making homeownership more accessible. Understanding the specific guidelines and limitations of these loans is important. VA loan limits influence the amount that can be borrowed without a down payment.
Defining VA Loan Limits
VA loan limits specify the maximum amount the Department of Veterans Affairs will guarantee on a loan without requiring a down payment from the borrower. These limits do not cap the total amount a veteran can borrow, but rather define the threshold for a zero-down payment loan. If a borrower wishes to purchase a home above this limit, a down payment may be required for the difference.
These limits are linked to the conforming loan limits established annually by the Federal Housing Finance Agency (FHFA) for conventional loans acquired by Fannie Mae and Freddie Mac. In most areas, the standard conforming loan limit for a single-unit property in 2025 is $806,500. Limits can be higher in designated high-cost areas, where median home prices exceed the baseline. For instance, in some high-cost counties, the limit for a single-unit property can reach up to $1,209,750 in 2025.
The FHFA adjusts these limits yearly to reflect changes in the average U.S. home price. Borrowers can find the specific loan limits for their county on the FHFA or VA websites.
VA Loan Entitlement Explained
Distinct from general VA loan limits, “entitlement” refers to the specific amount of guarantee the VA provides for an individual eligible borrower. This entitlement is the portion the VA pledges to repay a lender if a borrower defaults on their loan, typically up to 25% of the loan amount. The amount of available entitlement directly impacts a borrower’s ability to secure a loan without a down payment.
Borrowers fall into two categories: those with “full entitlement” and those with “partial entitlement.” Full entitlement is available to individuals who have never used their VA loan benefit, or who have fully restored their entitlement after previous use. With full entitlement, there is no VA-imposed limit on the loan amount that can be financed with no down payment, provided the lender approves the loan based on the borrower’s financial qualifications. Partial entitlement applies when a portion of a borrower’s entitlement is currently tied up in an existing VA loan or was used on a prior loan that resulted in a foreclosure or compromise claim without full repayment.
Entitlement can be restored under conditions, allowing a borrower to reuse their full benefit. The most common way to restore full entitlement is by selling the home purchased with a VA loan and fully paying off the mortgage. Another option is a “one-time restoration,” which allows a borrower to restore their full entitlement even if they retain the property, provided the original VA loan has been fully paid off. This one-time restoration is useful for those who wish to convert their primary residence into a rental property while purchasing a new home. To initiate a restoration, borrowers need to complete VA Form 26-1880, Request for a Certificate of Eligibility, and provide proof of the loan payoff.
Calculating Your VA Loan Amount
Determining the maximum no-down-payment VA loan amount involves combining VA loan limits and individual entitlement. For borrowers with full entitlement, the VA does not impose a limit on the loan amount for which it will provide a guarantee, so a down payment is not required if the lender approves the loan. The lender will assess the borrower’s income, credit history, and assets to determine affordability.
For borrowers with partial or remaining entitlement, the calculation is more specific. The maximum amount that can be borrowed without a down payment is influenced by the county loan limit and the amount of entitlement already used. To calculate the remaining entitlement, determine the maximum entitlement for their county, which is 25% of the county’s conforming loan limit. From this, subtract the amount of entitlement already used on a previous or existing VA loan. The remaining entitlement is then multiplied by four to determine the maximum loan amount that can be financed without a down payment.
For example, if the county loan limit is $806,500, the maximum entitlement is $201,625 (25% of $806,500). If a borrower has already used $40,000 of their entitlement, their remaining entitlement would be $161,625 ($201,625 – $40,000). This remaining entitlement of $161,625, when multiplied by four, indicates a maximum no-down-payment loan amount of $646,500. If the desired home price exceeds this calculated amount, the borrower will be required to make a down payment equal to 25% of the difference between the purchase price and the maximum no-down-payment loan amount.