New In 2020! VA Removes Loan Limits For Fully Eligible Veterans

Lifting Of The VA Loan Limit

Amazing news for fully-entitled veterans and servicemembers making home purchases with their VA loan! A bill, H.R. 299, was signed in June 2019, which enables homebuyers using a VA loan to borrow above the 2019 conforming loan limit, with NO down payment. That’s right, NO loan limit, NO down payment – as long as you’re pre-approved and can afford the payments! This change takes effect on January 1, 2020 and includes homes that are in escrow in November 2019 with closing dates on or after 1/1/20.

An important note is that the no down payment option is limited to veterans with their full entitlement available. If you have taken out a VA loan in another jurisdiction, the remaining amount that you can use for your Hawaii purchase will be calculated and subject to the standard conforming loan limit (2020 limit to be announced soon; presently, $726,525 for 2019).

New Funding Fees

At loan closing, a service member or veteran who uses a VA loan will pay a fee known as a “VA funding fee.” This fee rolled into the loan or paid in cash, has been increased slightly to provide an additional source of money for ongoing health care payments for a group of Vietnam War veterans who were exposed to Agent Orange.

Type of Loan Downpayment Percentage for First Time Use Percentage for Subsequent Use
Purchase and Construction Loans None

5% but less than 10%

10% or more







Cash-Out Refinance Loans n/a 2.30% 3.60%
IRRRLs n/a 0.50% 0.50%
Loan Assumptions n/a 0.50% 0.50%

Additional new provisions about the funding fee include:

  • Starting in 2020, active duty Purple Heart veterans are exempted from a funding fee.
  • Formerly, eligible veterans who gained eligibility through National Guard or Reserve service had to pay 0.25% more in funding fees. In 2020, this surcharge has been eliminated. Fees will be the same regardless of entitlement origin.
  • You do not have to pay the funding fee if you are a veteran receiving VA compensation for a service-connected disability, are the surviving spouse of a Veteran who died in service or from a service-connected disability; or if you who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay.

Your Hawaii Real Estate Resource

As a member of the Hawaii Life Real Estate Military Specialized Team, I am very excited about these upcoming changes and the added opportunities for pre-approved buyers who will be eligible to purchase at zero down, no limit. Please put my expertise in military buyers’ needs and Oahu’s real estate market to work for you!

Cathy Possedi

Cathy Possedi is a REALTOR, CRS, SRS, MRP, SFR with Hawai’i Life. You can email me at or via phone at (808) 728-5696.

Further Reading

The official VA announcement is available at this link.

For more information on VA Loans and pre-approval, please see:

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