What You Need to Know About the Latest Improvements to VA Home Loans

November 12, 2021

By Phil Georgiades

The year 2020 brought several changes to our lives, most of which have been unusual and nerve-racking. However, not everything was negative as some significant positive changes also took place, which will help Veterans and Active Duty Service Members become homeowners.

These changes came as the Blue Water Navy Veterans Act came into effect on January 1st, 2020. After being signed into law by the President of the United States on June 25th, 2019, these changes include removing VA loan limits and making changes to VA funding fees.

VA Home Loan Limit Changes These changes improved VA home loans by removing the previous VA county loan limits to the $0 down payment VA loans, which previously depended on the median home value per county. Now VA home loan recipients can purchase homes in more affluent communities without making a down payment.

One exception to removing limits is borrowers with more than one existing VA home loan. The second VA loan now has an average loan limit of $548,250 for 2021, a significant increase from the previous limit of $484,350 in 2019. These limits vary depending on the county’s cost of living, with more expensive places having higher loan limits for borrowers with more than one loan.

The United States Government guarantees VA loans; however, they do not administer the loans. Qualified lenders do the distribution of loans, and they are still required to make sure borrowers can afford to make their monthly mortgage payments. As a result, lenders can set their limits; currently, VA Home Loan Centers has a loan limit of $5,000,000 provided that the borrower can afford their monthly payments.

Native American Veterans who want to either build or purchase a home in a Federal Trust Land can now do so without loan limits.

VA Funding Fee Changes

The passing of this new law has also brought with it some temporary changes to the funding fee. This funding fee, which was usually around 0.15% for Active Duty Service Members, rose to 0.30%—also lowering the funding fee for members of the National Guard and the military reserves.

Service members who have received a purple heart now have the option to have their funding fee removed. The only requirement is that they close on their property while still on active duty. Disabled veterans who were already exempt from paying the funding fee did not see a change in the status.

VA Home Loan Eligibility

Being eligible for VA loans requires that the applicant be either a veteran, an Active Duty Service Member, or the spouse of a veteran who passed away due to their service. Also, eligible applicants must have served at least 90 active duty during wartime or 181 days of active duty during peacetime. Members of the National Guard or the military reserves must have served at least six years to qualify. Other VA home loan requirements include a credit score of at least 640 for most lenders. However, the VA does not have a set credit limit requirement. Therefore, some lenders are willing to help borrowers with lower credit scores.

VA Home Loan Benefits

Currently, VA loans are some of the most well-regarded home loans available due to the many benefits. These include zero down payment requirements, lack of mortgage premiums, low interest rates, low monthly payments, and no prepayment penalties. Moreover, these loans also offer 15 to 30-year fixed-rate mortgage options.


The changes brought on by the passing of the Blue Water Navy Act have allowed qualifying service members and veterans to purchase their dream homes. Improving the same VA home loan program has helped more than 18 million veterans reach the dream of homeownership since its establishment in 1944.

Phil Georgiades is the CLS for VA Home Loan Centers, a government-sponsored brokerage specializing in VA Home Loans. He has about 22 years of experience working in real estate. To apply for a VA mortgage loan or get more information, give Phil a call at (877) 432-5626.

« Back

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.