Each year, the Federal Housing Finance Agency (FHFA) revises conforming loan limits for the upcoming year. These are revised according to the housing market to accurately reflect price fluctuation. This change is done to guarantee that the loans correlate to housing prices so there is little discrepancy between prospective homeowners and the market.
Here at Reichert Mortgage, we strive to provide home buyers with the most up-to-date information on conforming loan limits every year. As a member of the Colorado Springs community, I understand the difficulty that comes with navigating the constantly changing loan limit landscape. Today we are exploring the new VA loan limits Colorado and how they affect you.
What Are The Conforming Loan Limits in 2021?
Conforming loan limits are adjusted yearly to more accurately reflect the housing market. These limits are specified per every single county in the United States. As you explore home loan options, it is always recommended to check the county you are looking to buy a home in so you know what to expect for the revised limits. These loan limits apply to anything that Freddie Mac and Fannie May guarantee, like conventional loans. What these limits do is inform potential buyers as to the mortgage limit per number of units that Freddie Mac and Fannie Mae need to abide by when purchasing mortgages. Anything that exceeds these limits are known as jumbo loans.
El Paso County Loan Limits
Here are the conforming loan limits 2021 for El Paso county for the upcoming year:
One-Unit Limit: $548,250
Two-Unit Limit: $702,000
Three-Unit Limit: $848,500
Four Unit Limit: $1,054,500
How Do These Limits Affect VA Loans?
These limits affect people differently depending on their current VA loan status.
If you have something called full entitlement, you do not have a home loan limit. Full entitlement is either when you have never used a home loan benefit, finished repaying a previous loan benefit and sold the property associated with that benefit, or have had a foreclosure after using a benefit but paid off it in full.
Even though veterans with full entitlement do not have a limit, this does not mean that you have an endless amount to borrow. You still need to meet VA loan requirements for buyers that are designated by the lender. These requirements consist of various factors like your credit history, income, and assets you possess.
If you have any sort of remaining entitlement on a current benefit, you do have a limit for your home loan. If you are unsure if you have any remaining entitlement, here are some common situations that indicate you do: you are still paying back an active loan, you had a foreclosure but did not repay the VA loan in full, or refinanced a VA loan into a non-VA loan and you still own the property.
The 2021 conforming loan limits only apply to borrowers who still have remaining entitlement on a previous loan.
VA Loan Limits Repealed in 2020
It is good to briefly revisit the legislation that was repealed in 2020. Last year as of January 1st, 2020, the limits for federally-establishing VA home loans were removed. This limit was removed for full entitlement specifically, and it extends to eligible veterans, current service members, and survivors. Even though VA loan limits were appealed, conforming loan limits still apply to people who have entitlement on their loans. This essentially means that if you have not paid back a loan you received prior to the 2020 repeal, you still have to abide by the conforming loan limits.
How Do These Conforming Loan Limits Affect Me? | Contact The Reichert Mortgage Team!
If you find yourself needing assistance in applying for a home loan, we can help! As a qualified mortgage team, we want to work with you to make your future as a homeowner a reality. Whether you need help refinancing your current home or navigating the VA loan program, contact us today to get started! Serving the Colorado Springs community is our passion as we bring education and dedication to all of our clients. We look forward to meeting you and bringing you into The Reichert Mortgage Team family.