Top-Ranked VA Specialty Lender Will Start Offering Home Loans Based on the Dept. of Veterans Affairs Newly Announced 2014 VA Loan Limits in New Year

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iFreedom Direct®, a top-ranked VA specialty lender, will start offering home loans backed by the U.S. Department of Veterans Affairs according to the newly announced 2014 loan limits starting January 1. The limits will be effective through December 31, 2014 unless a plan to reduce the conforming loan limit of $417,000 is carried out mid-year.

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iFreedom Direct® VA Purchase Loan Manager, Stevie Weaver, says, “The good news for those relocating to expensive housing markets is that they will be able to bid competitively on homes in high-cost counties. ”

The VA announces new loan limits each year around this time based on the Federal Housing Finance Agency (FHFA) home price index. The Q3 report reveals home prices rose 2.0% from last quarter, and home prices appreciated 8.4% from this same time last year.

Based on this new information, veterans and other eligible borrowers can expect the conforming VA loan limit to remain at $417,000 for most U.S. counties, at least for the first part of 2014. Limits in certain costly housing markets can exceed that amount. In general, some limits for costly areas rose slightly compared to those of 2013. Due to consistently rising home prices in many areas,qualified veterans in some high-cost military communities, like Alameda County, CA for example, can potentially get a VA conforming home loan when they buy homes priced in line with the typically more expensive real estate markets there. The VA is committed to these prices through 2014, unless the FHFA announces a conforming limit reduction.

In general, VA loan limits for 2014 in most areas are the same as last year. For instance, VA loan limits in high-cost counties in Alaska stayed at $625,500. However, limits in almost all high-cost counties in California, New Jersey and New York are up significantly, as much as $250,000 or more in some areas. Hawaii, Guam, and U.S. Virgin Islands will remain the same for the most part with the exception of Honolulu, which fell to $625,500 from last year’s limit of $750,000. Other states, which show changes up or down, include Colorado, Massachusetts, Maryland, Utah, Washington, West Virginia and Wyoming. Interestingly, all high-cost counties in Virginia are down more than $150,000, indicating house price decreased there.

New to the list of higher limit counties this year are several California and Colorado counties, as well as Monroe County in Florida and Bristol County in Massachusetts. Several counties in Rhode Island and Tennessee also made the list of high-cost areas for 2014. Off the high-cost list for 2014 are the counties of Lake, Colorado, and Salt Lake and Tooele counties in Utah. Loan limits in these counties dropped to $417,000.

VA guarantees for loans up to $1 million or more are still possible in parts of Massachusetts as well as California. If a loan limit decreased in 2014 compared to 2013 for any county, the VA will guarantee the higher limit as long as there is proof of a pre-approval and a sales contract or a Uniform Residential Loan Application (URLA) executed before the New Year.

The VA list contains only the names of counties with limits higher than the conforming limit. The list can vary from year to year as real estate markets adjust to the housing market. Since Q2 2011, home price indices have been reporting year-over-year increases. This year the FHFA’s report shows an increase every quarter so far, and this may be a sign of housing market recovery.

iFreedom Direct® VA Purchase Loan Manager, Stevie Weaver, says, “The good news for those relocating to expensive housing markets is that they will be able to bid competitively on homes in high-cost counties.” Weaver goes on to say, “And some existing homeowners who have been underwater may finally see their home values rising again.”

The VA does not really “limit” how much qualified veterans can borrow with their VA home loan benefits. Instead, the limits are used to indicate the maximum loan amount for which the government will provide its guarantee. Most VA purchase loans within the limit can be obtained without a down payment. Likely, loans exceeding the limit will require some cash down to cover the portion that is not guaranteed by the VA. Regardless of the VA’s county loan limit, an applicant will have to qualify for the specific loan amount based on credit and income.

iFreedom Direct® specializes in government-backed loans with little or no money down. The licensed loan professionals at iFreedom Direct® assist eligible borrowers with VA and FHA loan products including purchase loans, streamline refinance and cash-out refinance loans.

To learn more about the VA loan limits in your neighborhood visit http://www.ifreedomdirect.com.

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Valery Behr
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