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VA Loan Changes Help DC Area Home Buyers

VA loans are a popular choice in the DC area, due to the major military presence in the nation’s capital. Many veterans who utilize this benefit of military service are able to secure home loans with very low or zero down payment, and they enjoy extremely competitive interest rates. Unfortunately, due to the higher home prices in the DC area, loan limits on VA loans often made it more difficult to purchase larger family homes or in highly competitive areas.

No more.

Beginning January 1, 2020, the Blue Water Navy Vietnam Vietnam Veterans Act of 2019 has eliminated maximum loan amounts there were previously imposed on veterans by the Federal Housing Administration (FHA). Previously, the loan limit was $484,350 in most of the country, although the DC area was afforded slightly higher limits due to higher home values. However, with many homes in the DC area exceeding $600,000, veterans were often forced to make a large down payment (usually 25% of the difference between the FHA loan limit and the purchase price of the home), according to This effectively negated one of the primary benefits of the VA loan program – the low or zero down payment feature, which discouraged many veterans from using this valuable benefit.

Removal of this limit may make owning a home in the DC area more affordable for many veterans.

It is important to remember, however, that the VA does not directly make loans. The VA utilizes a network of approved lenders, to agree to fund loans for veterans within VA guidelines, in exchange for certain protections and guarantees if the borrower should default.

These approved mortgage lenders can impose their own limits on VA loans, or deny very large loans. However, these limits are specific to the lender and the VA is not a barrier. You should always talk to multiple lenders before choosing the best one to meet your needs. If one lender is unwilling to consider a larger loan, shop around until you find  lender that will work with you.

While VA loans offer very low or no-downpayment options, there some additional fees you should be aware of before deciding which loan program is best for you. For instance, the VA requires a “funding fee” up front, which used to be 2.15%. The blue Water Navy Vietnam Veterans Act of 2019 increased this fee to 2.35%. The fee is waived for veterans who receive VA disability benefits or for Purple Heart recipients still on active duty.

Your best bet is to talk to a qualified lender who can guide you through the mortgage options you qualify for and discuss with you the advantages and disadvantages of each program. You will want to make an informed decision. If you need recommendations for local VA lenders, we can help!

When it is time to sell or buy a home, having a local team you can rely on will make the process a smooth one. Call the Realtors® who love where they live and understand the local real estate market. ADMC Realty Group happily serves veterans in and around the Washington DC, Maryland, and Northern Virginia areas. From start to finish, we’re here to help with all your Real estate needs. Give us a call at (202)596-8101 or email us at [email protected].

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