As you start to look into becoming a Hawaii homeowner, you may ask yourself, “What exactly is a VA loan limit?” Let’s start with the current numbers. In Hawaii, the 2019 VA loan limit for all islands is $726,525. Hawaii is considered among the “high cost counties” of which there are 199 across the nation. In most markets that are not high cost, the VA loan limit is $484,350.

These maximum conforming VA loan limits are determined by the Federal Housing Finance Agency (FHFA). Now that you know the VA loan limit for Hawaii, you may still wonder what exactly is meant by the term “loan limit?” Read on!

Q: Is the Hawaii VA loan limit the ultimate max amount any veteran or active duty service member can use to buy a home using their VA loan benefit?

A: No, it’s not. In fact, calling this number the maximum loan amount can cause confusion. Rather, this number is the maximum 100% financing loan amount.

Therefore, buying a home over this amount will require a down payment. This financing route is referred to as the VA Jumbo Loan.

Here’s an example of how the down payment is calculated:

  • Purchase Price = $900,000
  • Honolulu County VA Loan Limit = $726,525
  • Difference = $173,475

Since the VA will guarantee 25% of the total loan amount, the veteran must cover 25% of the difference shown above:

  • Difference = $173,475 x 25% = $43,368.575
  • Down Payment = $43,368.75

Then, you subtract the down payment requirement from the purchase price and get your “Base Loan Amount”:

  • Purchase Price ($900,000) – (Down Payment) $43,368.75 = Base Loan Amount of $856,631.25

What Purchase Price Can You Be Pre-Approved For?

During the preapproval process with your VA Loan Specialist, you will learn more about the purchase prices you can begin to consider while house hunting. Pre-approval is a thorough process that reviews documents and verifies figures in order to assure the VA buyer and their real estate agent that financing will go through. The documents needed for preapproval are:

  • Most recent LES or Pay Stubs (one month)
  • Last 2 years W2 statements
  • Last 2 years Federal Tax Returns
  • Last 2 months Bank Statements

Hopefully, we’ve clarified the meaning of “loan limit” for you and you feel encouraged to reach your home buying goals. If you’re ready to get going with your VA loan benefits, give us a call at 808-792-4251 or fill out this short online application.

Mahalo for choosing Hawaii VA Loans, Hawaii’s oldest VA loan specialized lender, as your source for VA loan information!