I get asked this often from veterans who think there’s some secret cap on their VA loan that prevents them from buying expensive homes.
There isn’t.
Look, I recently helped a veteran buy a $2.125 million home in Promontory Club in Park City, Utah. Zero money down. 100% financing. Air Force veteran. Beautiful home. No complications.
But somehow this myth just won’t die that VA loans are only for starter homes or modest purchases.
Key Things Every Veteran Should Know:
- Veterans with full VA entitlement have no loan limits since 2020
- You can buy million-dollar homes with zero down payment
- The Blue Water Navy Veterans Act eliminated previous restrictions
- Primary residence requirement still applies (60 days to move in, 12 months minimum)
- Credit scores of 620+ typically required for jumbo VA loans
- Debt ratios can go up to 55% with compensating factors
What Happened in 2020 That Changed Everything
Here’s what you need to know about why this changed everything. Back in 2019, Congress passed something called the Blue Water Navy Vietnam Veterans Act. Most people think it was just about Agent Orange exposure for Navy veterans. And it was. But buried in that legislation was this provision about VA loan limits that completely changed the game.
Starting January 1, 2020, if you have full VA entitlement, there’s no loan limit. Period.
Before this change, if you wanted to buy a home above your county’s loan limit, you had to put down 25% of the difference. Now? The VA will guarantee 25% of whatever loan amount your lender approves, regardless of the purchase price.
This opened up markets that were basically off-limits to veterans before.
Where Veterans Are Actually Buying These Homes
I’ve been in this business for over 20 years, and since 2020, I’ve seen veterans successfully buy expensive homes in markets that used to be nearly impossible with VA loans.
San Diego: The Top VA Loan Market
San Diego is probably the biggest example. With median home prices above $1 million now, San Diego County sees more VA loans than any other county in the United States. Makes sense when you think about it. Massive military population. Expensive real estate. Veterans need homes somewhere.
In San Diego, veterans are routinely using VA loans for homes well over $1 million. The combination of no down payment and competitive rates makes it a no-brainer for military buyers who can qualify for the payments.
California’s Bay Area: Highest-Value VA Purchases
California’s Bay Area is even more extreme. Despite home prices that make your eyes water, veterans are buying there too. According to the data I’ve seen, San Francisco-Oakland-Berkeley actually ranks first nationally for the highest property values purchased by veterans. We’re talking an average of $1.13 million per transaction. These veterans also have the highest incomes among new veteran homeowners at $214,000 annually. So they can afford it.
Hawaii: Zero Down on Island Paradise
Hawaii’s another market where this really matters. In places like Oahu and Honolulu, you can buy a $900,000 starter home and watch it appreciate to over $1 million in three years. Veterans have been taking advantage of the no-limit benefit since 2020. Hawaii’s got a huge active-duty population, and the real estate is expensive, so VA loans are essential.
Seattle: Pacific Northwest Luxury
The Pacific Northwest has seen increased activity too. Seattle’s average home price sits around $847,000, with plenty of neighborhoods well above $1 million. King County shows up regularly on lists of high VA loan activity areas.
Park City: Mountain Resort Communities
Even mountain resort communities work now. That Park City deal I mentioned? Promontory Club is about as exclusive as it gets. But my client had full entitlement and the income to support the payment. No problem.
The key point here: Geography doesn’t matter anymore. If you have full entitlement, you can buy expensive homes anywhere in the country, assuming you qualify with your lender for the monthly payment.
Understanding Full vs Remaining Entitlement
Now, here’s the thing about this benefit. This no-limit benefit only applies to veterans with full entitlement.
You have full entitlement if:
- You’ve never used your VA loan before, OR
- You used it previously but paid off the loan completely and sold the property
Either way, your entitlement gets restored to full status.
You have remaining entitlement if:
- You currently have an active VA loan, OR
- You paid off a previous VA loan but still own that property
In these situations, the old county loan limits still apply.
Most veterans buying million-dollar homes have full entitlement. They’re either first-time users or they’ve sold previous homes and have their entitlement back.
Primary Residence Only
Before we go any further, let’s be clear about something. VA loans can only be used for primary residences. You have to intend to live in the home as your main residence.
This means you can’t use your VA loan to buy that million-dollar investment property you’ve been eyeing. The VA requires you to occupy the home within 60 days of closing and live there for at least 12 months, unless you get military orders requiring you to move.
Now, once you’ve met the occupancy requirement, you can convert the property to a rental if you move. I’ve seen veterans build impressive real estate portfolios this way. Buy with VA loans, live in the properties, then convert to rentals when they move to their next home.
What Lenders Actually Look At
Just because the VA will guarantee a multi-million dollar loan doesn’t mean every lender will approve it. Lenders care about your ability to repay the loan, not the VA’s guarantee amount.
When they’re evaluating your qualification for a high-dollar VA loan, lenders calculate your total monthly housing payment including principal, interest, property taxes, insurance, and any HOA fees. They want to make sure this total payment, along with all your other monthly debt obligations, fits within acceptable debt-to-income ratios.
Credit Score Requirements
For VA loans over $806,500, which they consider Jumbo loans, the minimum credit score is typically 620. Some lenders want 640. The VA doesn’t set these minimums, but individual lenders do for high-balance loans.
Income Requirements
Debt ratios are interesting. Lenders want to see that your total monthly debt payments don’t exceed 41% of your gross monthly income. But debt ratios can actually go as high as 55% with proper compensating factors.
Those compensating factors include:
- Meeting 120% of the VA’s residual income requirement
- Higher credit scores above the minimum
- Large cash reserves covering three months of mortgage payments (principal, interest, taxes, insurance)
- Low consumer debt
- No significant increase in housing expense from your current situation
- Additional household income not used to qualify for the loan
The key is finding a lender who actually knows how to do high-balance VA loans. Not every mortgage company understands how to structure these transactions properly.
VA Funding Fee Considerations
There is one additional cost. The VA funding fee.
- For first-time users: 2.15% of the loan amount (on a $1 million loan, that’s $21,500)
- For subsequent uses: 3.3% (or $33,000 on the same loan amount)
The fee percentage is the same regardless of the VA loan amount.
However, this fee can be rolled into your loan amount, so you don’t need cash at closing. And if you have a VA disability rating, you’re exempt from the funding fee entirely.
Even with the funding fee, VA loans usually provide better overall value than conventional loans because of the zero down payment requirement and no private mortgage insurance.
Real Examples From My Files
Let me tell you about that Park City transaction. Air Force veteran wanted to buy in Promontory Club. The home was listed at $2.125 million.
With a conventional loan, he would have needed a $425,000 down payment plus private mortgage insurance. Instead, we did a VA loan with zero down payment. Transaction closed smoothly. No complications from the VA loan structure.
I’ve also helped another Air Force veteran refinance his home in Las Vegas for $1.3 million using a VA cash-out refinance. These transactions aren’t unusual anymore. They’re exactly how VA loans are supposed to work for qualified veterans with full entitlement.
High Cost Areas Where This Really Matters
The no-limit benefit is most valuable in high-cost areas where home prices regularly exceed $1 million. These markets include:
- Most of California, especially the Bay Area, Los Angeles, Orange County, and San Diego County
- Hawaii, particularly Oahu and Maui
- Seattle and surrounding King County areas
- Boston and Massachusetts high-cost counties
- New York metropolitan area
- Denver and Boulder County, Colorado
- Washington DC metro area
- Luxury resort towns like Park City, Aspen, and Jackson Hole
In these markets, being able to finance expensive homes with zero down payment gives veterans a real competitive advantage.
Common Misconceptions I Keep Hearing
Veterans call me constantly with wrong information about their loan limits. Here are the most common myths:
“VA loans are capped at the county loan limit.”
Wrong. That only applies if you have remaining entitlement, not full entitlement.
“You can’t use a VA loan for luxury homes.”
Wrong. There’s no property type restriction beyond basic habitability requirements.
“VA loans take longer to close on expensive homes.”
Wrong. The process is the same regardless of loan amount.
“Sellers won’t accept VA loan offers on million-dollar homes.”
Wrong. Smart sellers care about qualified buyers, not loan type.
“The VA funding fee makes expensive VA loans too costly.”
Wrong. Even with the funding fee (2.15% for first-time use, 3.3% for subsequent use), you’re usually better off than conventional financing with 20% down.
Frequently Asked Questions
Can veterans really buy homes over $1 million with no down payment?
Yes, if you have full VA entitlement and qualify with your lender for the monthly payments. The Blue Water Navy Veterans Act eliminated loan limits in 2020.
What's the highest amount someone can borrow with a VA loan?
There's no VA-imposed limit for veterans with full entitlement. Your maximum loan amount depends on what your lender will approve based on your income and credit.
Do luxury home sellers accept VA loan offers?
Smart ones do. VA loans are government-guaranteed mortgages with competitive interest rates. Qualified buyers are qualified buyers, regardless of loan type.
Is the VA funding fee worth paying on expensive homes?
Usually yes. Even with the 2.15-3.3% funding fee, you're typically better off than putting 20% down on a conventional loan plus paying private mortgage insurance.
Which areas see the most million-dollar VA loan purchases?
San Diego leads in volume, while the San Francisco Bay Area has the highest average purchase prices at $1.13 million per transaction.
The Bottom Line
If you’re a veteran with full entitlement and the income to support the payments, you can buy a million-dollar home with your VA loan. No down payment required. No artificial limits imposed by the VA.
The Blue Water Navy Vietnam Veterans Act eliminated the barriers that previously restricted veterans from using their benefit on expensive properties. This change opened up luxury markets nationwide to qualified military buyers.
Your service earned you this benefit. Don’t let outdated information or misconceptions prevent you from using it to its full potential.
Whether you’re looking at a beachfront home in San Diego, a luxury condo in downtown Seattle, a ski resort property in Park City, or a waterfront estate in Hawaii, your VA loan benefit can help you achieve those goals.
The key is working with a lender who understands high-balance VA loans and finding a real estate agent familiar with military buyers in luxury markets.
About The Author - Jason Skinrood
