What Is VA Circular 26-22-18?
The Department of Veterans Affairs (VA) regularly releases circulars to announce policy updates for the VA Home Loan program. Circular 26-22-18, published in late 2022, provides the Federal Housing Finance Agency (FHFA) 2023 conforming loan limits, which determine how much a Veteran may borrow under certain entitlement conditions.
If you have full entitlement available, this circular won’t affect you—VA loans with full entitlement no longer have a county loan limit (per VA Circular 26-19-17). However, if you have partial entitlement, these new limits can impact the maximum loan amount you can borrow without a down payment.
(Source: VA Circular 26-22-18, December 1, 2022)
Understanding Conforming Loan Limits
A conforming loan limit is the maximum loan amount set each year by the Federal Housing Finance Agency (FHFA) for loans that conform to Fannie Mae and Freddie Mac standards.
For VA loans, these limits help calculate how much entitlement you can use when you don’t have your full benefit available.
Think of it this way:
-
If you’ve never used your VA benefit or restored it, you have full entitlement—no limit applies.
-
If you still own a home financed by a VA loan or haven’t restored that entitlement, your remaining benefit is partial—and the conforming loan limits matter.
Full vs. Partial Entitlement Explained
Full entitlement means the VA will guarantee up to 25% of the loan amount for any lender-approved VA loan—no loan limit applies.
Partial entitlement applies if you:
-
Still own a property financed with a VA loan, or
-
Haven’t restored entitlement after paying off a previous VA-backed loan.
When you use your VA benefit again while holding another VA loan, the lender must calculate your remaining entitlement based on your county’s conforming loan limit.
How to Calculate Remaining Entitlement (Example)
Let’s look at how this works in practice.
Suppose you bought your first home for $300,000 using a VA loan. The VA guarantees 25% of the loan, so you used $75,000 of entitlement.
Now, you’re being reassigned and want to buy another home without selling your first one.
If your new county’s 2023 conforming loan limit is $726,200, here’s how you calculate your remaining entitlement:
-
Take 25% of the county’s limit:
$726,200 × 25% = $181,550 -
Subtract the entitlement already used:
$181,550 − $75,000 = $106,550 remaining entitlement -
Multiply by four to estimate your maximum no–down payment loan:
$106,550 × 4 = $426,200
That’s the maximum VA loan amount you could obtain with no down payment, given your remaining entitlement.
New 2023 Conforming Loan Limits by Region
VA Circular 26-22-18 sets the 2023 standard conforming loan limit at $700,200 for most U.S. counties.
However, certain high-cost areas have higher limits:
-
Alaska, Hawaii, Guam, and the U.S. Virgin Islands: $1,089,300
If your loan exceeds your remaining entitlement, you can still use a VA loan—but you’ll need to make a down payment covering 25% of the difference between your loan amount and the maximum guarantee.
Special Note:
If a county’s 2023 limit is lower than its 2022 limit, but your loan application was signed before January 1, 2023, the VA allows use of the higher 2022 limit for loans closing after that date.
(Source: VA Circular 26-22-18, Section 5)
Important Guidelines in Circular 26-22-18
Here are a few key takeaways from the circular:
-
Multifamily Homes: If you’re buying a 2–4 unit property using bonus entitlement, only the single-unit loan limit applies for entitlement calculations.
-
IRRRL Loans (Interest Rate Reduction Refinance Loans): The conforming loan limits do not apply to IRRRLs—you can refinance anytime, regardless of previous entitlement usage.
-
Effective Dates:
-
Applications signed before January 1, 2023 may use 2022 limits if higher.
-
All other loans use the 2023 limits effective January 1.
-
What This Means for Veterans and Lenders
For Veterans with full entitlement, loan limits no longer restrict your VA loan amount—your lender’s approval and your financial qualifications determine how much you can borrow.
For those with partial entitlement, the conforming loan limits are crucial. They dictate how much entitlement remains and how much down payment may be needed for a new purchase.
Example:
-
If your remaining entitlement covers 25% of the loan amount, you may not need a down payment.
-
If it falls short, the lender will require a down payment equal to the uncovered portion to meet VA’s 25% guarantee requirement.
Lenders calculate this carefully using your COE (Certificate of Eligibility) and local loan limit data.
Final Thoughts and Professional Guidance
Circular 26-22-18 clarifies entitlement calculations and 2023 conforming loan limits for Veterans with partial entitlement.
If you’ve moved, still own a VA-financed property, or are unsure about your remaining benefit, don’t guess. These calculations affect your buying power and potential down payment.
Reach out to a Vetted VA–approved professional or refer to your VA Lender’s Handbook (Chapters 3 and 4) for accurate entitlement guidance.
Understanding your VA benefits is part of protecting them—and using them wisely.
