Orange County VA Loan Limits Increase through end of 2012

Orange County VA loan limits 2012The VA loan limits in Orange County, CA were already at a high level in 2012. Effective August 6, 2012, the VA loan limits for 100% financing in Orange County has been increased from $621,000 to $675,000. The Honoring America’s Veterans and Caring for Camp Lejeune Families ACT of 2012 brought several changes to the Veterans Guaranty loan program. The biggest change is that the calculation for each counties zero down limit has been reverted back to the old version (pre-2012). The new loan limits applies to all VA loans closed from August 6, 2012 through December 31, 2012.

$675,000 with No Down Payment in Orange County, CA

$675,000 buys a nice home in Orange County. This limit also applies to Los Angeles County. The property can be a single family home or a condo. If it is a condo then the condo project needs to be on the VA Approved Condo list. It is also possible to use VA financing to purchase a 2, 3, or 4 unit property as long as at least one of the units will be occupied by the Veteran.

How about a $1,000,000 Jumbo VA loan?

Technically, VA does not have a “limit”. There is a limit for 100% financing, but it is possible to purchase a home for more than the 100% financing limit by coming in with a small down payment. A down payment equal to 25% of the difference between the 100% financing limit and the purchase price is required. For example, if Johnny Johnson wants to buy a home in Irvine with VA financing for a price of $775,000, then a down payment of $25,000 is required. The base VA loan would be $750,000. ($775,000 price less $675,000 limit = $100,000. 25% of $100,000 is $25,000, which is the down payment.) That end up being 3.23% down payment on a $775,000 purchase price. With no mortgage insurance and a low fixed rate. There is no other type of financing that can touch a VA loan.

Refinance to VA loan at $675,000 with No Equity in Orange County

This new loan limit is not just for purchasing a home. It also works for a refinance. For a Veteran who bought their home several years ago and put 20% down, but now has no equity, this can be a great solution. Especially since the Conforming loan limit in Orange County is $625,500. Not only does a Conventional loan require 20% equity for a refinance (unless you are able to get Private Mortgage Insurance which is an added expense and is expensive), but VA interest rates are most likely lower than a high balance Conforming loan. And almost certainly lower than a Jumbo 30 year fixed on a Conventional loan.

The first step in determining whether a VA loan is right for you is to contact a local Orange County VA loan specialist. Your VA loan officer should be able to prepare custom loan scenarios after a quick conversation over the phone. The loan scenarios should give you a very clear and concise break down of the numbers involved in purchase or refinance to a VA loan. Even better, your loan officer should be able to prepare a custom “screen capture” video which will walk you through loan scenarios, answering questions you may have.

VA Loan in Orange County | Test Case | Lake Forest, CA

Lake Forest, Orange County VA Loan VA loan financing is going strong in Orange County cities like Lake Forest. With the 2011 VA loan limit for 100% financing in Orange County at $700,000, Veterans in Orange County, CA are able purchase very nice homes with no down payment.  Below is an example of a recent closing in Lake Forest where an Orange County first time home buyer bought a house using a VA loan with no down payment.

Zero Down VA Loan on $620,000 Lake Forest, CA Home

Not all first time buyers are looking for a $250,000 condo. In Orange County, first time home buyers are quite often very well qualified, high salaried, couples or individuals. In this case, Charlie and Suzanne Gunner (names have been changed to protect the privacy of the home buyers) were shopping for a home in the south Orange County cities of Mission Viejo, Lake Forest, Ladera Ranch, and Rancho Santa Margarita. There credit was excellent, with FICO scores of 731 and 745. They also had over $25,000 in the bank, along with a 401K.  The Gunner’s had talked to a few Orange County lenders who suggested that FHA financing was the best way for them to go. They were told that VA financing, even though they were eligible since Charlie had served in the Marine’s during Desert Storm, was too difficult and took too long to close. But then they found a local Orange County VA loan expert who was able to lay out a comparison of an FHA loan versus a VA loan for them.

FHA Loan Versus VA Loan

For those Orange County home buyers who are eligible, a VA loan has many advantages over FHA financing, which will save the VA borrower thousands of dollars over the life of the loan.

  • VA will finance up to $700,000 in Orange County with no down payment. FHA will finance up to $729,750 in Orange County, but requires a 3.5% down payment. On the Gunner’s $620,000 home, they needed $0 to buy their home, not counting closing costs. With FHA, they would have needed $21,700 for the down payment. Since they only had $25,000 liquid in the bank, the FHA loan would have cleaned them out, and they would have needed to have the seller pay all of their closing costs. With VA, if they were in a competitive offer/counter offer situation, they would be able to pay their own closing costs and still have money left over.
  • VA has a Funding Fee of 2.15% for first time user VA borrowers. On a $620,000 base loan, this equates to a $13,30 VA Funding Fee, which is added to the loan. So the total VA loan amount is $13,330. FHA actually comes out a little better here. FHA has an Upfront Mortgage Insurance Premium equal to 1% of the loan amount. After factoring the down payment requirement, the FHA UFMIP would be $5,983. While there is some savings, both the Funding Fee and the UFMIP are not paid out of pocket, they are financed into the loan. The result is minimal. Also, for Orange County VA Loan eligible home buyers who have a minimum 10% VA disability (you’ll know if you have it), the Funding Fee is waived. No Funding Fee.
  • FHA has a Monthly Mortgage Insurance added to the payment. The MMI is equal to .9% of the loan amount, divided by 12. On a $620,000 purchase price, the MMI would be approximately $465 per month. VA loans do not have any type of Monthly Mortgage Insurance. This resulted in a savings for the Gunner’s of $465 per month. $5,580 per year, or $61,000 over the 11 years that the FHA loan would have the MMI.

Typical Concerns about VA Financing in Orange County

The Gunner’s were still a little concerned about whether they could buy a home with a VA loan. They had been told that sellers didn’t like VA financing and the Listing Agents tended to shy away from VA financing. Also, there was concern that the VA appraisal process would be more rigorous that on an FHA or Conventionally financed loan. But that is not the case. FHA and VA appraisals are very similar. The primary focus of an appraisal is to make sure the property is worth what the home buyer is paying for it. On Government loans, the appraiser will look a little more closely at safety issues, such as loose wires, peeling lead paint, broken windows, water damage, etc. But most home buyers, especially a first time home buyer, should be concerned about those issues as well. They typically will come up on the Home Inspection report, which is recommended for all home buyers. Also, VA requires a termite inspection report, with all items cleared. Again, this is something that most homebuyers should want anyway.

VA Loan PreApproval

Once the Gunner’s were comfortable with the fact that a VA loan was in their best interest, they moved forward with getting PreApproved. The process was quick, but thorough. They needed to provide two years tax returns and W2’s, one months paystubs, two months bank statements, copies of their drivers license and social security cards, as well as Charlie’s DD214. The Orange County VA lender was able to quickly retrieve the VA Certificate of Eligibility, run credit, and get the initial “Automated” loan approval. The Gunner’s annual gross income of $130,000 easily qualified them for a purchase price of $670,000, even with the $600 car payment they had.

The lender also had an in house VA Underwriter review the file, providing an underwritten loan approval. The whole process only took a few days. But now, the Gunner’s were ready to get serious about finding a home.

Time to Buy an Orange County Home

The Gunner’s also found a great Orange County Real Estate agent familiar with VA financing. Within weeks they had viewed several homes before finding a great home in Lake Forest, offered at $630,000. After a week of counter offers, they went into contract to purchase the home for $620,000 with the seller paying $10,000 in closing costs. The VA loan closed in 30 days. Closing was very smooth, primarily because the Gunner’s had done their research and had been PreApproved before making an offer on a home. The Gunner’s are now happily in their beautiful Lake Forest home. They are doing a few minor upgrades, which they are able to do because of the money they saved by choosing a VA loan.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer – Please contact my office at Home Point Financial for more information about an Orange County, CA home loan.  949-640-3102. MLO 223456

Contact us for your Orange County VA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

tstorm (at)


Buy a Home In Orange County for $0 Down with a VA Loan

Orange County home buyers, both First Time home buyers and move-up home buyers, are finding out quickly that the days of 100% financing are in the past. However, there is still a program available that will allow for 100% financing. The catch is you need to be a Veteran.

Orange County VA Loan Limit for 2009

Most areas of California have a loan limit of $417,000 for 100% financing. Veterans are allowed to go with a higher loan amount, but a down payment is required. However, Orange County is considered a “high cost” county. VA eligible home buyers can purchase a home for $737,500 with $0 down payment. The limit is the same in Los Angeles. In San Diego the 100% financing limit is $593,750, while in San Bernardino/Riverside the limit is $417,000.

What is the VA NO NO?

Commonly referred to as the VA NO NO, this refers to when the VA homebuyer negotiates to have the seller pay all of the closing costs, including originations fees, title, escrow, recording, insurance, taxes, and interest. The VA buyer can literally buy a home with ZERO money out of pocket.

First time buyers can even get paid to buy a home if they are able to take advantage of the $8,000 Federal Tax Credit for First Time home Buyers. Anyone who hasn’t owned a home during the last three years is considered a First Time Buyer. There are certain limitations, especially in regards to income limitations (or maximums). This program is scheduled to end November 30, 2009, so anyone who is planning to take advantage if the tax credit needs to act quickly.

Where Does an Orange County Veteran go for a VA Loan?

You just need to find an Orange County VA Lender. It helps if they have the ability to actually fund the loan rather than just originate the loan and “broker” to another company for funding. You will also want to find a loan officer who is an Expert in VA Financing and can explain the benefits, as well as give accurate estimates of the payment and closing costs associated with a VA loan.

Orange County Borrowers are Taking Advantage of the IRRRL?

One of the best things about a VA loan is the VA Streamline Refinance program, also know as the IRRRL, or Interest Rate Reduction Refinance Loan. This program allows current VA borrowers to lower their interest rate with very little hassle.

Authored by Tim Storm, an Orange County, CA Loan Officer MLO 223456– Please contact my office at Emery Financial Group for more information about an Orange County, CA home loan.  877-786-4243 x 7.

Contact us for your Orange County VA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

877.786.4243 x 7 | tstorm (at)