Maximum VA Loan Amounts in California, Relative to Home Prices

In 2017, the maximum VA loan amount in California is $636,150. But these maximums vary by county, so home buyers who plan to use a VA loan to buy a house should research the maximum VA loan amount in the county where they plan to purchase.

Here’s an updated look at the maximum VA amounts in California, in relation to home prices.

Maximum VA Loan Amounts in California

Technically speaking, the Department of Veterans Affairs does not actually limit the amount a person can borrow with a VA-guaranteed mortgage loan. But they do limit the amount they are willing to guarantee, and these limitations can indirectly affect your borrowing capacity.

According to the Department, the maximum VA loan amount for California ranges from $424,100 up to $636,150. Because these figures are based on home prices, cities and counties with more expensive real estate markets tend to have higher loan limits.

Related: VA requirements for borrowers

How They Compare to Home Prices

The median home price in California was around $500,000, as of June 2017. The first thing you’ll notice is that this number falls near the middle of the maximum VA loan range mentioned above. This is intentional. The VA’s caps are based on the ones used by the Federal Housing Finance Agency for conforming mortgage loans, which are in turn based on median home values.

Of course, the median home price in California varies from one area to the next. Consider the difference between San Bernardino, where the median price is currently around $254,000; and Santa Clara, with a median that’s north of $1 million.

In some of the more expensive real estate markets in California, the maximum VA loan amount could fall well below the median home price. In such cases, borrowers might have to make a down payment that’s a percentage of the difference.

Borrowing More Than the Max

In a previous article, we explained how eligible home buyers could borrow more than the maximum VA loan amount by making a down payment. In short, borrowers in these scenarios are typically required to make a down payment equaling 25% of the difference between the loan limit for the county and the amount being borrowed.

Most people who use VA loans to buy a home in California stay within those limits, so that they can enjoy 100% financing. In these cases, borrowers can purchase a house with no money down whatsoever. That’s the primary advantage of using a VA loan in the first place — and that’s why most borrowers try to stay within the limits.

Just know that you can borrow more than the maximum VA loan amount for your California county, if you are willing to make an investment of some kind. And there are still advantages to using this program, even if you do have to put some money down.

As mentioned above, loan limits vary from one county to the next because they are largely based on median home prices. And they tend to be the same across an entire metro area. Here are the maximum VA loan amounts for California’s major metro areas:

• Los Angeles: $636,150
• Riverside-San Bernardino: $424,100
• Sacramento: $488,750
• San Diego: $612,950
• San Francisco: $636,150
• San Jose: $636,150

Ask us! Do you have questions about using a VA loan to buy a home in California? We can help. At Bridgepoint Funding, we are passionate about this program, because it rewards our brave men and women in uniform. Our in-house experts can answer any questions you might have about maximum VA loan amounts, or other aspects of the program. Please contact us to get started.