Another year, another increase in the conforming loan limits for Alameda County (and most of…
A new report from the U.S. Department of Veterans Affairs showed that 2020 was a big year for VA loans. It also revealed the average VA loan amount in California, which is currently $482,754 for purchase mortgages.
Once again, California led the nation in terms of the total number of VA loans issued during the fiscal year. In 2020, a total of 130,659 VA-guaranteed mortgage loans were issued across the Golden State. That was the highest number of any state in the country. Not surprising, when you consider the size of our population and the number of military folks who live here.
Let’s take a closer look at these and other statistics, issued recently by the Department of Veterans Affairs.
2020 a Big Year for the VA Mortgage Program
As mentioned above, 2020 was a big year for VA loans in California and elsewhere across the nation. That’s a bit of an understatement, actually. The department guaranteed well over 1 million loans during fiscal year 2020, and that’s in spite of a global pandemic and economic downturn.
According to a November 2nd blog post from the Department of Veterans Affairs:
“VA announced Oct. 28 that it achieved a record year in its home loan program by guaranteeing more than 1.2 million home loans in fiscal year 2020, totaling more than $363 billion to help Veterans afford homeownership.”
That’s a record level of volume, and it equates to roughly 3,200 home loans per days over the course of the fiscal year.
Average VA Loan Amount in California
Separately, a state-by-state report issued by the department revealed the average VA loan amount in California, across various mortgage types. Here are the average amounts by category.
- $438,986 for all VA loans, regardless of type
- $482,754 for purchase loans (used by home buyers when purchasing a property)
- $427,845 for home refinance loans (through the VA’s IRRRL refinance program)
These are just the averages across all borrowers, for fiscal year 2020. Mortgage loans originated under this program can be much larger than the figures shown above. That’s especially true in places like the San Francisco Bay Area, where the typical home price is much higher than the statewide average.
The average VA loan size and amount for California could climb in 2021, and for two reasons. First, home prices across the state continue to climb steadily. So the average mortgage amount will likely be higher next year than it is right now. Secondly, the Department of Veterans Affairs has eliminated the official limits for the VA loan program.
In the past, borrowers who used this program were limited to a certain loan size (if they wanted to take advantage of the zero-down-payment option). But that requirement was eliminated at the start of this year. You can learn more about that official rule change here.
Bottom line: Don’t mistake the average VA loan amount for California as a hard limit or “cap.” Borrowers with sufficient income and good credit can borrow more than the amounts shown above. Please contact us if you have questions about using this mortgage program to buy or refinance a home.
A Great Financing Option for Military Members
Are you eligible for a VA loan in California? If you’re a military member in good standing, or a veteran with an honorable discharge, you’re most likely qualified for this unique program.
It’s arguably the best mortgage option for military folks who can qualify. The VA loan program allows borrowers to buy a house with no money down, and usually without mortgage insurance. Those are two big benefits, from a borrower’s perspective.
You can learn more about the basic eligibility requirements here.
Mortgage Rates Hit Record Lows in 2020
We’ve covered the average VA loan amount in California. It was $438,986 for all mortgage types.
In closing, we’d like to say a few words about mortgage rates. This has been one of the biggest news stories within the mortgage industry, during 2020. Home loan rates in the U.S. have fallen sharply over the past few months, setting one record after another. In fact, we just hit another record low this week.
On November 19, 2020, Freddie Mac reported that the average rate for a 30-year fixed fell to 2.72%. That was the thirteenth record low for 2020, based on their weekly survey of the mortgage industry. It’s pretty incredible, when you consider that the average was hovering around 3.66% just a year ago.
It bears repeating: Conventional, FHA and VA mortgage rates in California have never been as low as they are right now, on average. It’s a great program with many benefits, and there has never been a better time for borrowers to take advantage of it.
Questions? Bridgepoint Funding specializes in the VA loan program. Located in the San Francisco Bay Area, we are proud to help borrowers throughout California. Please contact us if you’d like to find out what amount you qualify for, or if you have other questions relating to the program.