The FHFA announced the new 2022 conforming loan limit of $647,200, which also happens to be good news for VA homebuyers. This meaningful increase of 18.26% higher than the 2021 limit of $547,250 is especially important to VA homebuyers, because the conforming VA loan limits are afforded the same ceilings set by FHFA for conventional loans acquired by Fannie Mae and Freddie Mac, according to SoCal VA Homes.
Now, active service members and Veterans using their VA loan will be offered a more powerful financing tool, backed by the loan guaranty from the Dept. of Veterans Affairs.
The company states that VA Jumbo rates are always higher, so, the lower VA conforming rates offered to Veterans up to these new elevated VA loan limits are very likely to improve home affordability for most VA buyers. Additionally, the elevated VA loan limits can also maintain it for other VA buyers in regions that have experienced significant price appreciation.
“This loan limit increase will provide essential housing support for our community. Buyers using their VA have been experiencing an intense challenge qualifying for higher loan amounts and the equal challenge of getting offers accepted as prices have been rapidly rising. This is agitated by significant participation from real estate investors paying cash, who see opportunity in a fast-moving market with very little supply,” said Peter Van Brady, author of Avoiding Mistakes & Crushing Your Deals Using Your VA Loan and founder of SoCal Va Homes.
“This good news from FHFA, which helps Veterans afford higher prices is also layered on top of the recovery of the secondary mortgage market for government loans, after its COVID illness. With the revival of loan premiums available at higher rates, we've returned to the practice of paying for all the closing costs that many of our VA borrowers would not have otherwise been able to afford. This is often a necessary component to successfully purchasing their home.”
