New VA Home Loan Changes in 2020

VA loan changes 2020

A VA home loan is the greatest benefit given to our Veterans.

No mortgage insurance or down payment is required.

In this article we’re going to take a look at the new changes coming to the VA loan program in 2020.

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New Act to Remove Loan Limits

In June the Government passed the Blue Water Navy Vietnam Veterans Act (read the Act here) which will go into effect on January 1st, 2020.

This act does two things, raises the VA funding fee and eliminates VA loan limits. It will also provide benefits to disabled Vietnam Veterans and their family members.

The funding fee replaces mortgage insurance, which is required on all other types of mortgages, except VA loans. The funding fee is a one time fee that is paid at closing.

The loan limit is the maximum loan amount a borrower can receive.

Increased VA Funding Fee

The funding fee amount will depend on whether or not it’s your first time using a VA loan. The current VA funding fee for first-use borrowers is 2.15% of the loan amount, starting in 2020 this will raise slightly to 2.30%. Subsequent use funding fees will increase from 3.3% to 3.6%.

The increase is minimal and considering borrowers are able to roll the fee into the loan should not really affect people that much.

2020 VA Funding Fee Chart

Regular Military
Down payment Fee (first-time buyer) Fee (subsequent use)
0% 2.30% 3.6%
5-10% 1.65% 1.65%
10%+ 1.40% 1.40%

VA Loan Limits Eliminated

The loan limit is the maximum loan amount you can receive on a mortgage. The limits vary depending on the County you live in, but in most areas the limit is $484,350. It may be higher, or lower depending on if you live in a high-cost or low-cost area.

The elimination of loan limits on VA loans is a huge win for Veterans buying more expensive homes, or those who live in high-cost areas.

The current VA loan limits will remain in place until Jan. 1, 2020.

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