Military families tend to land in expensive places. San Diego, the Washington, D.C. suburbs, Honolulu, Puget Sound: the bases sit where housing costs run high, and a PCS move can take you from a modest market to a very costly one in a single set of orders. If you bought with your VA benefit along the way, a VA refinance in a high-cost county can look complicated. Mostly it isn't. The rules are fixed and published, and the hard part is that they depend on one thing most people never look up: how much of your VA entitlement is still available.
This guide explains how county loan limits actually touch a VA refinance, which of your options ignore them entirely, and how to run the numbers for your own situation before you talk to anyone.
The short version: limits only matter if your entitlement is partly used
The VA states it plainly on its loan limits page. If you have full entitlement, there is no VA loan limit. You can borrow as much as you qualify for and the appraisal supports, with no down payment required by the VA.
You generally have full entitlement if one of these is true:
- You have never used your VA home loan benefit.
- You used it, sold the home, and paid that loan off in full.
- You used it, paid the loan off, and already restored your entitlement through the one-time restoration process.
The county loan limit comes back into play only when part of your entitlement is still tied up in another VA loan. For military families, that is common. You buy at one duty station, get orders, and keep the first house as a rental instead of selling into a soft market. The VA loan on that house keeps its share of your entitlement until it is paid off.
How the 2026 county loan limits work
The VA does not set its own county limits. It borrows the conforming loan limits published each year by the Federal Housing Finance Agency. For 2026, FHFA set the baseline one-unit limit at $832,750, up from $806,500 in 2025. In high-cost areas the one-unit ceiling is $1,249,125, which is 150% of the baseline. Many counties near major installations sit somewhere between those two figures, and each county has its own number.
FHFA updates these limits every year, usually in late November for the following January. The figures in this article are 2026 values. If you are reading this after the 2027 limits come out, the method stays the same and only the inputs change.
The remaining entitlement math, step by step
When part of your entitlement is in use, the VA uses a short formula to work out how much guaranty you have left in your current county:
- Take your county's one-unit loan limit and multiply it by 25%.
- Subtract the entitlement already tied up in your other VA loan.
- The result is your remaining entitlement.
- Multiply that by four to find the largest loan you can take without the lender asking for money down.
The VA's own example uses a $900,000 county limit and $50,000 of entitlement already in use. That leaves $175,000 of remaining entitlement, which supports a loan of up to $700,000 with nothing down.
The reason for the "times four" step is that lenders generally want the VA guaranty, plus any down payment or equity, to cover 25% of the loan. Once the loan goes past four times your remaining entitlement, the guaranty no longer reaches that 25%, and the VA notes that a lender may require a down payment for the gap.
A worked example
Picture a Navy family. They bought their first home at a lower-cost duty station with a $240,000 VA loan. VA entitlement in use on that loan is 25% of the loan amount, so $60,000. They received orders to a county with a hypothetical one-unit limit of $1,000,000, kept the first house as a rental, and bought again with their remaining entitlement.
Their remaining entitlement in the new county works out like this:
- 25% of $1,000,000 is $250,000.
- $250,000 minus the $60,000 in use leaves $190,000.
- $190,000 times four is $760,000.
So $760,000 is the loan size their remaining guaranty fully supports. A refinance at or below that number fits cleanly. Above it, the lender's own guidelines decide how the shortfall is handled. In a refinance there is no purchase down payment, so the questions become how much equity you have and whether you would need to bring cash to closing or take a smaller loan. That answer varies by lender, so get it in writing early.
Swap in your own county limit and your own prior loan amount, and you have the figure that shapes every option below.
Your VA refinance options in a high-cost county
The IRRRL: the county limit doesn't apply
The VA's Interest Rate Reduction Refinance Loan, often called the IRRRL or VA streamline refinance, replaces an existing VA loan with a new VA loan. It reuses the entitlement already attached to that loan rather than drawing new entitlement, so the county limit math above does not come into it.
A few points matter for military families in particular:
- It works on a former home. The VA asks you to certify that you live in the home now or used to live there, so a house you kept as a rental after a PCS can still qualify.
- The funding fee is 0.5% of the loan amount, per the VA's funding fee page, and it can be rolled into the new loan along with closing costs.
- The VA does not require an appraisal for a standard IRRRL, although a lender may order one under its own rules.
An IRRRL has one honest limit: it does not put cash in your pocket. It is about the payment, the term, or moving from an adjustable rate to a fixed one. Lenders also have to show you recoup the costs within a set window, generally 36 months, so a refinance that only shifts costs around is screened out.
The VA cash-out refinance: this is where the limit matters
A VA cash-out refinance replaces your current mortgage, VA or not, with a new, larger VA loan, and you receive the difference in cash. You must live in the home you are refinancing, so this option is for your current residence and not a former one you now rent out.
Because a cash-out refinance creates a new guaranty, your entitlement position is central. If you have full entitlement, the county limit does not cap you. If you have partial entitlement, the four-times figure from the formula above is your clean ceiling, and anything beyond it depends on equity and lender guidelines.
The funding fee is also higher here: 2.15% for first use and 3.3% for subsequent use. In a high-cost county those percentages turn into real dollars. On a $700,000 cash-out loan, 3.3% is $23,100. That is a reason to look at the whole cost of the loan and not only the monthly payment.
The funding fee exemption most families miss
You don't pay the VA funding fee at all if you receive VA disability compensation for a service-connected condition, if you are eligible for that compensation but receive retirement or active-duty pay instead, if you are a surviving spouse receiving Dependency and Indemnity Compensation, or if you are an active-duty service member who received a Purple Heart. The VA lists every exemption category on its funding fee page.
If a disability claim is pending, it is worth knowing where it stands before you close. The exemption is a benefit you earned through service, and on a large loan in an expensive county it can be worth more than $20,000.
Freeing up entitlement tied to an old duty-station home
If the old house is what is limiting you, the VA recognizes two routes for getting that entitlement back.
The first route is to sell. When you sell the home and the VA loan is paid in full, the entitlement is restored and can be used again.
The second route works once. The VA allows a one-time restoration of entitlement when the VA loan has been paid off but you still own the property. One way families do this is to refinance the rental out of its VA loan into a non-VA investment property loan, such as a DSCR loan that qualifies on the property's rental income, and then request the restoration. This is a one-time option, so it deserves a careful look at whether now is the right moment to use it.
There is also substitution of entitlement. If another eligible veteran assumes your VA loan and substitutes their own entitlement, yours is released.
Each route has its own costs and trade-offs. Selling ends the rental income, and refinancing the rental changes its cash flow. Partial entitlement can be fixed. It is a condition of your current paperwork, and it can change.
Look past the rate: the full picture in an expensive market
In high-cost counties, the size of the loans makes small percentages large. A sound VA refinance decision usually weighs four things.
- Total cost, including the funding fee, closing costs, and how long you will hold the loan.
- Your blended rate. A low rate on your first mortgage can feel like something to protect at all costs. But if you also carry credit card or personal loan balances at much higher rates, what you actually pay is the weighted mix across all of it. Smart people miss this every day, because no statement ever shows it to you.
- Residual income. VA underwriting checks what is left each month after major expenses, and the required amount varies by family size and region. In expensive areas property taxes and insurance weigh more heavily in that calculation.
- Your next set of orders. If another PCS is likely within a few years, the break-even on any closing costs matters more than usual.
You can do all of this without guessing where the market goes next. Your own numbers, laid side by side, are enough.
Where to start
The first step is small. Request your Certificate of Eligibility through VA.gov if you don't have a current one. It shows how much entitlement is in use. Then look up your county's one-unit limit for the current year on FHFA's website and run the four-step formula above.
When you have that figure, a GoodLoan loan officer can go through your options with you: the IRRRL on a former home, a cash-out refinance on your current one, or a plan to free entitlement tied up in a rental. GoodLoan is a VA-approved lender licensed through the NMLS, and we tell people when a refinance doesn't make sense for them. We say no a lot, and that is part of the job.
Frequently asked questions
Is there a VA loan limit in high-cost counties?
Not if you have full entitlement. The VA removed loan limits for borrowers with full entitlement, so the only caps are what you qualify for and what the appraisal supports. County limits matter only when part of your entitlement is already tied up in another VA loan.
Does an IRRRL use more of my VA entitlement?
No. An IRRRL replaces an existing VA loan and reuses the entitlement already attached to it, so county loan limits do not affect it.
Can I do a VA cash-out refinance on a house I rent out after a PCS move?
No. The VA cash-out refinance requires you to live in the home you are refinancing. A former home you now rent out may still qualify for an IRRRL, because that program accepts homes you used to live in.
What are the 2026 conforming loan limits?
For 2026, FHFA set the baseline one-unit limit at $832,750 and the high-cost ceiling at $1,249,125. Each county has its own figure within that range, and the limits are updated every year.
How do I get my VA entitlement back if I kept my old house?
You can sell the home and pay off the loan, use the one-time restoration if you pay off the loan but keep the home, or have an eligible veteran assume the loan and substitute their own entitlement.
Who is exempt from the VA funding fee?
Veterans receiving VA compensation for a service-connected disability, those eligible for it but receiving retirement or active-duty pay instead, surviving spouses receiving Dependency and Indemnity Compensation, and active-duty service members who received a Purple Heart, among others listed by the VA.
