New VA Loan Limits for 2025

The new conforming loan limits have now been released for 2025 and go into effect with home loans closing after January 1, 2025. Although the limits vary by county across the country, every county in Texas has the same conforming loan limit for 2025. This newsletter explains when specific limits apply and when they don’t and how to calculate them.

What is the new county loan limit in Texas for 2025?

The county loan limit in Texas was previously $647,200 (2022), $726,200 (2023), and $766,550 (2024). As of January 1, 2025, the new county loan limit in Texas increases to $806,500. Therefore, any loan over $806,500 is considered a “jumbo” loan and may be subject to higher interest rates which vary by lender. Keep in mind, the county loan limits vary by county nationwide, but in Texas they happen to be the same for every county, which for 2025 is?$806,500.?

What does the county loan limit mean for VA homebuyers?

The answer depends if you have full VA entitlement or partial VA entitlement. “Entitlement” is the amount the VA will guarantee to the lender so that you can have a no-down-payment VA loan. (Entitlement is not the same thing as qualifying. Qualification based on credit, income, debts, etc. is a separate matter.) With full VA entitlement, the county loan limit is not a factor, but with partial VA entitlement, it is a factor.

FULL?VA entitlement allows a VA loan up to?$2,000,000?if:

• You?never had a VA loan before
• Your previous VA loan was sold or paid off (and entitlement restored)
• Your previous VA loan was assumed by someone using their?entitlement
• Your current VA loan will be paid off before your new purchase
• You qualify for the loan up to $2,000,000
• (This full entitlement limit may vary by lender.)

PARTIAL?VA entitlement limits your total VA loans to $806,500?if:

• You are keeping your current VA loan
• Your previous VA loan was assumed using your entitlement, not theirs
• Some of your VA entitlement was lost to VA foreclosure, short sale, or deed in lieu
• Max loan is $806,500?MINUS any open VA loans tying up some of your entitlement
• You have?the option to put down 25% of the amount exceeding your max loan

What is an example of using full VA entitlement?

Let’s say you are purchasing a home for $2,000,000 with your VA loan. You could potentially get a VA loan for the full $2,000,000 with no down payment and no mortgage insurance, assuming you qualify for the payment. VA loans over $1,000,000 are more difficult to qualify for, but the option to go up to $2,000,000 on VA is an option for anyone with full VA entitlement and the ability to qualify for it.

What is an example of using partial VA entitlement?

Let’s say you purchased a home for $300,000 with no down payment. You then lived in the home for one year to meet the primary residence occupancy requirement. Now you are going to buy a new primary residence with another VA loan and keep your current home as an investment property with the VA loan on it.

Here is what the numbers look like:????????????????????????

$806,500? ? ?County Loan Limit for 2025

($300,000)? ? VA Purchase #1 (no down payment)

$506,500? ? ? Remaining Zero Down Available

$506,500? ? ? VA Purchase #2 (no down payment)

If the home price for your new home is $506,500, then you will not have any down payment. If you go over that amount, you will need to put down 25% of the amount over your available entitlement. For instance, if the home price is $606,500, that would be $100,000 over your available amount and would therefore require a down payment of 25%, or $25,000, in this case. The VA loan would be for $581,500, plus any VA funding fee, if applicable.

Can I use my VA Certificate of Eligibility to figure out how much I have available?

Yes; however, in some instances we have seen the Certificate of Eligibility (COE) misinterpreted and that has led to veterans not using their VA loan. Once entitlement is used for a VA loan up to $144,000, the COE will say “This Veteran’s Basic Entitlement is $0” even though they have something called “Second Tier Entitlement”. Your lender should be who gets your COE and who calculates your entitlement and zero-down loan limit.

What is second tier entitlement?

Second tier entitlement is what allows you to have two or more VA loans at the same time. When you have a VA loan exceeding $144,000, everything over $144,000 is considered “second tier entitlement”. To utilize the full amount of partial entitlement we described above, the new loan needs to exceed $144,000, so that second tier entitlement can be used. This does not come up often, but when it does, you may see something on your pre-approval letter that says "New VA loan must exceed $144,000.”

If my VA COE shows an active loan that I am keeping, how much do I have left?

The amount of your remaining entitlement will change every time the county loan limit changes, but for now we’ll calculate it based on the new 2025 county loan limit.??Let’s assume your COE says that you have $45,000 in “Entitlement Charged” and you are keeping that loan. Start by taking the 2025 county loan limit in Texas of $806,500 and multiply times 25%, because that is how much the VA will guarantee to the lender if it later goes into foreclosure and the lender has a loss. The answer is $201,625. Then subtract the $45,000 of entitlement already tied up, as reflected on your COE. That brings you to $156,625 left for the VA to guarantee. That needs to be multiplied by 4 to get $626,500, which is the max VA loan amount you have currently available without a down payment. You can go higher, but anything over that amount will require a down payment. The down payment would be 25% of anything over $626,500. Again, we highly recommend having your lender calculate this for you.

Is the loan limit the same for Veterans Land Board (VLB) loans?

Not exactly. As of today, the VLB Housing Assistance Program stops at $766,550. The VLB is expected to increase their home loan program to $806,500 in January 2025. Any amount over that amount would require a down payment of the entire amount over $806,500 when using the VLB’s Housing Assistance Program.

In Summary…

The Texas county loan limit is increasing to $806,500 for loans funded in 2025. With full VA entitlement, the limit jumps to $2,000,000 for those who qualify.?

Got questions about VA loans?

Great, just email?[email protected]?or call/text 512-357-7762, because everyone needs a VA Loan Specialist!

Are you a Texas Realtor? Would you prefer my monthly VA newsletter by email, which includes information about my VA CE classes for Realtors? If so, subscribe here: https://mailchi.mp/chadbowman/newsletter.

Disclosures: Veterans United Home Loans is a VA-approved lender, not affiliated or endorsed by any government agency, including the VA. Chad Bowman, Austin Branch Manager, NMLS 191475. Company NMLS 1907. Equal Opportunity Lender. More info. at ChadBowman.com.