Solano County Loan Limit Overview: FHA, VA and Conforming

Update: View 2021 loan limits for Solano County

Different mortgage loan programs have different limits associated with them, and they can vary from one county to the next. Today, we will take a look at the FHA, VA and conforming loan limits for Solano County, California as of 2020.

At a glance: The conforming loan limit, which applies to conventional mortgages in particular, is currently set at $510,400. Anything above that level would be considered a jumbo loan in Solano County, as of 2020. The current FHA loan limit is $506,000, for a single-family home.

FHA Loan Limit in 2020: $506,000

The 2020 loan limit (or maximum) for an FHA loan in Solano County is $506,000, for a single-family home. That’s the most a person can borrow when using this particular program.

If you want to use an FHA loan to buy a house within Solano County, you’d be limited to borrowing $506,000. That’s not the maximum home price that’s allowable. That’s just the limit for the loan itself. If you wanted to purchase a home above that amount, you could add some of your own money.

Conforming Loan Limit in 2020: $510,400

Let’s start with some terminology to avoid confusion. Most mortgage loans can be classified as either conventional or government-backed. Government-backed home loans include programs like FHA and VA.

Conventional mortgage loans, on the other hand, do not receive any kind of government insurance or guarantee. The conforming loan limits we are about to talk about apply to conventional mortgage products, specifically.

In 2020, the conforming loan limit for Solano County is set at $510,400. These limits are established by the Federal Housing Finance Agency, or FHFA. As mentioned earlier, they are based on median home values within a particular county.

If you borrow more than the conforming loan limit for Solano County, you would be entering “jumbo” mortgage territory. A jumbo loan is one that exceeds the conforming limits established by the FHFA.

As you might have guessed, jumbo mortgages often have stricter requirements, due to the large amount being borrowed. There is a higher level of risk involved, so the requirements can be more strict.

Important Changes to the VA Program

VA loans, which are guaranteed by the U.S. Department of Veterans Affairs, used to have their own limits as well. They were usually aligned with the conforming loan limits mentioned above.

But starting in 2020, the VA limits for Solano County (and the rest of the country) were eliminated by new legislation.

This is good news for borrowers. It means there is no longer any government-imposed limit or maximum. Going forward, it’s entirely up to the lender to determine how much a person can borrow.

Related: Max VA loan amount in California

The Blue Water Navy Vietnam Veterans Act 2019 increased benefits for Vietnam-era veterans who may have been exposed to Agent Orange or other herbicides. It also made some significant changes to the VA loan program. As mentioned, it eliminated the limits that have long been associated with VA loans, starting in 2020.

According to the Department of Veterans Affairs website:

“VA-guaranteed home loans will no longer be limited to the Federal Housing Finance Agency (Federally-established) Confirming Loan Limits. Veterans will now be able to obtain a no-down payment home loan in all areas, regardless of loan amount.”

Solano County Home Prices Still Rising

As we mentioned in a recent housing market update, home prices in Solano County have risen steadily in 2020 despite the COVID-19 situation.

Will we see higher loan limits in Solano County in 2021, as a result of rising home values? That’s possible, but it doesn’t appear likely at this point.

While home prices in the county have risen during 2020, the median price point still falls below current loan limits. Historically speaking, loan limits are usually increased when the median home price for a certain county rises above the previous year’s limits.

• According to Realtor.com, the median listing price for Solano County was around $470,000 as of August 2020.
• The national real estate brokerage Redfin reported an average sale price of $490,000 in August.
• Zillow reported a median home value of around $460,000 during that same month.

You’ll notice that all of those figures fall below the conforming and FHA loan limits for Solano County. So we might now see an increase in those limits for 2021. We’ll know more at the end of this year, when federal housing officials announce changes for 2021.

Have questions? Bridgepoint Funding has been serving the Bay Area for nearly 20 years. We can answer any questions you have regarding loan limits for Solano County, or other mortgage-related topics. Please contact us with any questions you have. We look forward to hearing from you!