These are called compliant loan limits. The VA and FHA loan programs have different maximum amounts. The VA loan limit is the same as the limit for conventional compliant mortgages. The exact amount of the limit varies depending on the number of units in the house and the location of the property.
Homes in areas with a higher cost of living have higher mortgage limits compared to homes in areas with a lower cost of living. VA loans don't have a maximum debt-to-income ratio, but a ratio of 41 percent or less is often preferred. If you qualify, VA loans are a great option for homebuyers because they offer competitive interest rates and don't require a down payment. Remember that conventional loans are usually more suitable for borrowers with a higher credit score, while FHA and VA loans may be ideal for those with a lower score.
Conventional loans are common mortgage products available through banks, credit unions and online lenders across the country. Although VA loans don't have specific credit requirements, a lender can expect the person applying for a VA loan to have a good credit score. For both an FHA loan and a VA-backed loan, the home you buy must be the home you will be living in as your primary residence. Government-backed mortgages offer an affordable alternative to conventional loans and are great options for first-time homebuyers, low-income borrowers, and people with poor credit.
You won't have to pay mortgage insurance on a VA loan, even if you're not making a down payment, but there is a funding fee that varies depending on the amount you deposit and whether you've taken out a VA loan before. Since VA loans don't charge lifetime mortgage insurance premiums, you're likely to enjoy smaller bills if you choose this option. While you'll need to obtain a certificate of eligibility from the VA that shows that you've met the service requirements, meeting the other requirements is usually easier compared to a conventional loan. If you don't have a lot of money saved for your down payment or you don't have any money saved up, a VA loan may be the best option.
Surviving spouses or spouses of prisoners of war or veterans missing in combat may also be eligible to apply for a VA loan. It all boils down to what makes the most sense to you, which is why it's so important to compare loan options before making a decision. Eligible borrowers will be able to apply for larger loans backed by government-sponsored companies Fannie Mae and Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs. If you have the option of choosing between a VA loan and an FHA loan, in most cases you'll do better with a VA loan, thanks to its low down payment requirement, generous interest rates and lack of mandatory mortgage insurance.
If you're looking for a mortgage, it can be helpful to take a closer look at how FHA loans compare to VA loans.