How Do VA Loans Work?
Published on April 5, 2018

How Do VA Loans Work?

I often get questions about how VA loans work and what it takes to obtain one. The very first thing I'll touch on is the VA lending limit.

The VA only allows you to borrow up to a certain amount. This amount will vary by county. In San Diego County, for example, you can borrow up to $649,750 for a single-family residence.

One important point to be aware of is the fact that there are different lending limits for single-family homes, duplexes, triplexes, and fourplexes. In San Diego County, the VA lending limit is $831,800 for a duplex, $1,005,450 for a triplex, and $1,249,550 for a fourplex.

In Riverside, the VA lending limit is $453,100 for a single-family residence, $580,150 for a duplex, $701,250 for a triplex, and $871,450 for a fourplex.

So, what happens if you want to purchase a home above the VA lending limit? You actually do still have options in this scenario.

You can still purchase a home using a VA loan, even if that home is above the lending limit, so long as you pay 25% of the difference. So if you want to purchase a $700,000 single-family home in San Diego, the $649,750 covered by the VA loan leaves a total difference of $50,250. Of that $50,250, you would only have to come up with $12,562.

Moving on, people also often ask me what kind of incomes qualify for VA loans. Well, if you're active military, we can use every income source on your LES.

If you are no longer in the military or are retired, you can still use your current income so long as you have continued to do what you did while in the military. If in the military you were a mechanic and you are still working in that field, you can still use your new income to help you qualify.

"Remember that certain lending standards vary depending on county and income."

Unfortunately, you cannot use your GI bill because that income won't continue for three years.

VA disability income, however, does qualify. In fact, you can use 120% of VA disability income toward a loan, and if you're receiving at least 20% disability, you can have your VA funding fee waived.

Some counties even offer property tax exemptions for veterans who are 100% disabled. This varies by county and depends on your income, so consult with your agent and your county recorder's office for more information.

I hope this has answered some of your questions. Still, nothing compares to speaking with a lender about your specific circumstances. And to all veterans and active duty military members: Thank you for your service.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

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