The VA loan limit in Orange County, CA for 2015 will be $625,500. This is actually a decrease from the 2014 limit of $687,500, but is still a higher loan limit than most parts of the country. It is important to understand that this “loan limit” is for 100% financing. This means it is possible to purchase a home in Orange County, condo or Single Family Detached, for up to $625,500 with No Down Payment. It is also important to understand that with a small down payment it is possible to get a VA loan that is higher than $625,500. VA loans of over $1,000,000 are not unusual in Orange County, which is known for having high cost housing.
How are VA Loan Limits Determined?
Each year the Veterans Administration announces the new limits for 100% financing. The limit can vary from county to county. For example, in most counties the 100% loan limit is $417,000. In Riverside and San Bernardino counties the limit is $417,000. For the last few years the 100% loan limit was increased in order to help “spur economic” activity. Now, in 2015 the loan limits are tied to the Conforming loan limits set by the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac. Since the Conforming loan limit is $625,500 for Orange County, the VA loan limit now matches up with the Conforming amount. FHA does as well.
What About Jumbo VA Loans?
It is still possible to get a loan amount higher than $625,500. This is commonly known as a VA Jumbo Loan. A down payment is required, but when compared to other types of financing VA still comes out far ahead in most cases. The down payment is equal to 25% of the difference between the 100% loan limit and the purchase price. For example, if a Veteran purchases a home in Orange County for $725,500, which would be an even $100,000 over the 100% financing limit, then the down payment required would be $25,000. ($725,500 – $625,500 = $100,000. 25% * $100,000 = $25,000 down payment) This would mean the base VA loan amount (not including the VA Funding Fee if required) would be $700,500. In this scenario the Veteran was able to purchase an Orange County home with only 3.44% down payment. There is no other type of mortgage product that comes close to allowing that small of a down payment on a $725,500 purchase price. Even at a $1,000,0000 purchase price the down payment would be a little less than 10%. And the best part is VA offers very competitive 30 year fixed interest rates with no monthly mortgage insurance, which would be required on other types of financing when there will be less than a 20% down payment.
VA is Great for Purchasing OR Refinancing a Home
The VA program is great, whether you are looking to purchase a home or refinance into a VA loan. The first step in any home financing process is to talk to a local Loan Officer, and for VA financing, preferably an Orange County loan officer who specializes in VA financing. The loan officer should be able to prepare Custom Loan Scenarios that will give you the details you need to make a sound decision based on your long and short term financial goals. And of course, if you are planning to purchase a home, then VA Loan PreApproval is the first step.
Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at the Emery Financial. Direct line at 949-640-3102. www.OrangeCountyVALoans.com. I prepare custom VA 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.Google+