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VA Loans Can Exceed Limits; Subject Property Is Best Comp

Two quick reminders today.

1. VA Loans can exceed loan limits. When VA borrowers make an offer on a house that is well above the VA loan limits, borrowers only need to come in with 25% of the difference between the purchase price and the county loan limit.

Extreme Example: Price is $1,025,500. VA Loan Limit is $625,500. Down Payment would be $100,000, or 25% of ($1,025,500 – $625,500). The VA loan amount would be $925,500.

2. The Subject Property is its own best comp. This is why appraisers try to correlate to contract price even when there is a wide range of comparable sale prices. And equally important, this is why appraisers continue to correlate heavily to the recorded purchase price 6 months to a year after a transaction closes.

This is also why it is often difficult to appraise properties for values higher than the purchase price within one year of closing.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646