FHA vs VA loan limits: county caps vs full entitlement

“What’s the loan limit?” is one of the first questions a borrower asks about a government-backed mortgage, and for FHA and VA loans the answer works in almost opposite ways. The Federal Housing Administration publishes a hard cap that changes county by county every year. The Department of Veterans Affairs, for most of the veterans who qualify, no longer publishes a cap at all. Confusing the two — or assuming the old VA county limits still bind — is one of the more common mistakes in mortgage planning, and it can cost an eligible veteran the chance to buy a more expensive home with no money down.

This guide is strictly about the limits. If you want the broader head-to-head on down payments, mortgage insurance, and credit scores, read our FHA vs conventional vs VA mortgage comparison; for how the VA program works end to end, see the VA loan explained. Here we answer one question only: how much can each program let you borrow, and why?

For 2026, the FHA single-unit loan limit ranges from a national floor of $541,287 to a high-cost ceiling of $1,249,125, set by HUD as 65% and 150% of the $832,750 conforming loan limit. The VA, by contrast, has imposed no loan limit on veterans with full entitlement since January 1, 2020; only veterans with partial (reduced) entitlement remain bound by the county conforming limit, and their cap is calculated as the county One-Unit limit times 25% minus the entitlement already used.

How FHA loan limits are built — floor, ceiling, and everything between

The FHA does not set a single national number. Instead, HUD anchors every county’s limit to the conforming loan limit that the Federal Housing Finance Agency announces each November for Fannie Mae and Freddie Mac. For 2026 that conforming baseline is $832,750 for a one-unit property, a 3.26% increase over 2025 that tracks the rise in average US home prices under the Housing and Economic Recovery Act formula.

From that single anchor, HUD derives three things. The “floor” — the lowest an FHA limit can go in any county — is fixed at 65% of the conforming limit, which works out to $541,287 for 2026. The “ceiling” — the most FHA will insure anywhere — is 150% of the conforming limit, or $1,249,125. Counties that fall between those two extremes get a limit set at 115% of their local median home price, rounded to land somewhere inside the floor-to-ceiling band.

In practice this produces a three-tier map. The majority of US counties are inexpensive enough that 115% of the local median sits below the floor, so they default to the $541,287 floor. A smaller group of genuinely expensive counties — parts of coastal California, the New York City metro, the Washington, DC suburbs, and similar — bump up against the $1,249,125 ceiling. Everything in between gets its own number tied to local prices, which is why a borrower in, say, Denver or Nashville faces a different FHA cap than one in rural Ohio or one in San Francisco. A handful of areas treated as high-cost by statute — Alaska, Hawaii, Guam, and the US Virgin Islands — use the ceiling as their baseline.

The practical takeaways: always look up your specific county rather than assuming the floor, recognize that the limit climbs for two-, three-, and four-unit properties (the 2026 four-unit ceiling reaches $2,402,625), and remember that these figures attach to FHA case numbers assigned on or after January 1, 2026 under HUD Mortgagee Letter 2025-23.

Why the VA has no limit — and the one case where it still does

The VA used to mirror the FHA approach, publishing county-by-county loan limits that capped how much a veteran could borrow with zero down. That ended with the Blue Water Navy Vietnam Veterans Act, which took effect on January 1, 2020. The law removed VA loan limits entirely for veterans who have their full entitlement available. A qualifying veteran with full entitlement can now finance a home well above $832,750 — or above any county number — with no down payment, limited only by what a lender will approve based on income, credit, the borrower’s debt-to-income ratio, and the appraised value.

The crucial qualifier is “full entitlement.” Entitlement is the dollar amount the VA pledges to guarantee on a veteran’s behalf — the backstop that lets lenders offer no-money-down terms. A Certificate of Eligibility typically shows basic entitlement of $36,000, but for loans above $144,000 the VA adds bonus (or “Tier 2”) entitlement that scales with the conforming loan limit. A veteran has full entitlement when they have never used the benefit, or have used it and fully restored it by paying off and selling the financed home.

Limits reappear the moment entitlement is only partial. That happens in two common situations: the veteran still has an active VA loan (for example, they kept the first house as a rental and want a second VA loan on a new primary residence), or a prior VA loan was lost to foreclosure or short sale. With partial entitlement, the county conforming loan limit is back in play as the reference point for how much the VA will still guarantee.

How partial VA entitlement is calculated

The math is a short worksheet that VA.gov publishes, and it rewards working through an example. The VA guarantees 25% of a VA loan, so the calculation starts from the county One-Unit conforming limit, multiplies by that 25%, and subtracts whatever entitlement the veteran has already tied up.

Take the VA’s own illustration. Suppose the county One-Unit limit where the new property sits is $900,000 and the veteran has already used $50,000 of entitlement on an existing loan. First multiply the county limit by 0.25: $900,000 × 0.25 = $225,000. Then subtract the entitlement already used: $225,000 − $50,000 = $175,000. That $175,000 is the maximum the VA will guarantee on the new loan.

Because lenders generally want a full 25% guaranty before they extend zero-down terms, that guaranty figure also implies the no-down-payment ceiling. Roughly, a veteran can borrow about four times the remaining guaranty with no down payment ($175,000 × 4 = $700,000 in this example) before the lender asks for cash to cover the shortfall on anything above it. Buy a more expensive home than that and the veteran typically contributes 25% of the difference between the loan amount and the implied limit as a down payment — still a far better deal than conventional financing, but no longer truly zero down. This is also the mechanism behind a second simultaneous VA loan: the first loan consumes entitlement, and the leftover determines the no-down ceiling on the second.

What the limits actually mean for your purchase

If you are an eligible veteran buying your first home, the limit question is largely moot — full entitlement means the appraisal and your lender’s underwriting, not a published cap, decide your ceiling. If you are reusing the benefit or carrying a prior VA loan, run the partial-entitlement worksheet before you shop, because the county number genuinely constrains you again.

For an FHA borrower the limit is always live. A home priced above your county’s FHA cap simply cannot be financed with an FHA loan; you would move to a conforming conventional loan, or to a jumbo loan if the price also clears the conforming limit. Knowing the cap up front prevents wasted offers. And because both programs use loan-to-value as the lever that drives mortgage insurance and pricing, the loan amount you settle on interacts with far more than just eligibility. When you are ready to compare real numbers across lenders, our guide on how to shop a US mortgage walks through getting comparable quotes.

Sources

• HUD, “FHA Announces 2026 Loan Limits” (HUD No. 25-145) and Mortgagee Letter 2025-23 — FHA floor $541,287, ceiling $1,249,125, effective January 1, 2026: hud.gov/news/hud-no-25-145
• Federal Housing Finance Agency, “FHFA Announces Conforming Loan Limit Values for 2026” — baseline $832,750, +3.26%, high-cost ceiling $1,249,125: fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2026
• US Department of Veterans Affairs, “VA home loan limits” — no limit with full entitlement; partial-entitlement worksheet (county One-Unit limit × 0.25 − entitlement used): va.gov/housing-assistance/home-loans/loan-limits/
• VA, “Blue Water Navy Veterans and Your Home Loan Benefits” — loan limits removed for full entitlement effective January 1, 2020: benefits.va.gov/homeloans/bwnact.asp