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VA Changing Loan Limit Calculations

The way that limits are calculated on loans guaranteed by the Department of Veterans Affairs is changing next year.

This past August, VA released loan limits that are in effect during the first quarter of fiscal-year 2012. However, that three-month period ends this month.

While the agency already was guaranteeing loans up to a maximum amount of $417,000, some high-cost counties had limits ranging from $418,750 to $1,094,625 as a result of the Veterans’ Benefit Improvement Act of 2008.

In a bulletin issued Thursday, VA said that the method used to calculate loan limits for VA loans will change in 2012.

Although limits for counties in the lower 48 states will range from $417,000 to a possible maximum of $625,500, limits in Hawaii, Guam, Alaska and the U.S. Virgin Islands will range from $625,500 to $938,250.

“It’s possible Congress may pass legislation affecting the way our limits are calculated and if so we will post any changes on our website,” the bulletin stated. “We expect that any changes would result in slight increases to some limits — but no decreases.”

The department guarantees 25 percent of eligible mortgages up to the maximum loan limit. VA loans can exceed the loan limit, but the guarantee will only be based on the limit amount.

VA said that it has not yet received the county median prices on which loan limits are calculated. But it expects to have the information soon.

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