The VA loan limit for 2018 in Orange County, CA are now $679,650. This is for 100% financing. This is a significant increase of the 2017 VA loan limit of $636,150. The increased loan limit will Orange County Veterans purchase homes in the fast appreciating local real estate market.
Jumbo VA Loans in Orange County
It is important to understand that the $679,650 VA loan limit for Orange County is only the "limit" for 100% financing. VA does not actually have a maximum loan amount. However, when a Veteran applies for maximum financing on a home that is priced above the 100% loan limit, a down payment will be required. The down payment is equal to 25% of the difference between the loan limit and the higher purchase price.
For example, if a Veteran is purchasing a home in Irvine for $779,650 (an even $100,000 above the 100% limit of $679,650), the down payment will be $25,000. The VA loan will be $754,650. Using this formula, a Veteran could buy a home in Orange County for $1,000,000 and only need an $80,087 down payment, or 8% down.
Jumbo VA loans are made possible because of "Bonus Entitlement". Bonus Entitlement also is why it is possible for a Veteran whose Certificate of Eligiblity shows 0 Entitlement to still potentially get a VA loan with no down payment.
Standard VA Loan Limit
The standard VA loan limit for 100% financing is $453,100. Orange County, as well as several surrounding counties (Los Angeles, San Diego, Ventura, Santa Barbara etc) have higher limits because the home prices are, on average, higher than other parts of the county. Riverside and San Bernardino counties, where home prices are appreciating quickly but are lower than Orange County, have the standard 100% loan limit of $453,100. But the Jumbo VA Loan calculation still applies. Someone purchase a home Riverside for $553,100 would need a $25,000 down payment and could get a VA loan of $528,100.
The best way to determine what your numbers look like based on the new loan limits is to contact a California VA loan specialist who can prepare custom loan scenarios.
Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at the Home Point Financial. Direct line at 949-640-3102. www.OrangeCountyVALoans.com. I will prepare custom FHA and Conventional loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.