Veterans are turning to VA loans as housing costs squeeze American consumers
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VA loans are becoming a more common way to become a homeowner as high home prices and mortgage rates put pressure on buyers – but many veterans and service members still don’t fully understand the benefits they’ve earned.
A Rocket Mortgage and Redfin analysis of county records across the 40 largest US metropolitan areas found VA loans accounted for 7.7% of foreclosed home purchases in March, up from 6.8% a year ago and on pace for 2020’s largest March share in a decade.
The increase comes as eligible veterans, active duty service members and surviving spouses look for ways to lower the upfront cost of buying a home.
VA loans, backed by the Department of Veterans Affairs and issued by private lenders, often require little or no down payment and no private home insurance.
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VA loans typically require a minimum down payment and no private mortgage insurance. (Stock)
Even as VA loans gain momentum, many veterans and service members still don’t fully understand how the benefit can help them buy a home, according to Rocket Mortgage.
A January Rocket Mortgage survey of more than 1,100 active duty service members, veterans and their spouses found that 59% said they knew about VA loans, but less than half said they had used or planned to use one to buy a home.
Only 16% said they were aware of government-specific housing services, the survey said.
For Ryan Dandin, a former US Army cryptologic linguist and current Rocket Mortgage team member, the proceeds helped his family move from temporary military housing to a permanent home in Michigan.
Dandin spent years moving his family between military assignments, including stops in California and Germany. Even when the barracks are comfortable, he said, they never feel like their own.
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VA loans accounted for 7.7% of mortgage purchases in March, up from 6.8% a year ago and tied for 2020 with the largest March share in a decade. (Stock)
“When I left the military, all the focus was on VA health care and making sure we went through the appropriate steps to get the health care we needed and the disability rating we needed,” Dandin told FOX Business. “There may have been a footnote about VA mortgages, but it wasn’t the main focus.”
Home ownership, Dandin said, provided roots for his family.
Dandin said many veterans may think they don’t qualify or that buying a home is out of reach, but he encouraged them to look into it before making a decision.
“When we got our first home, that was the same idea I had,” Dandin said. “I didn’t know I could afford a home. I had absolutely no idea I would qualify.”
Steven Mohler, who served in the Army Reserves, also said veterans shouldn’t think the door is closed.
“Go for it! At least try,” Mohler told FOX Business. “It’s easy.”
Mohler said he also refinanced the VA loan and was able to get a lower mortgage on his home in Arizona.
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A recent survey of more than 1,100 active duty service members, veterans and their spouses found that 59% said they knew about VA loans. (iStock/Getty Images Plus)
“I have a beautiful home here in Arizona,” she said. “I got money with low interest. I can’t believe it.”
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Dandin said veteran homeownership has more meaning compared to America’s 250th year.
“Home ownership is one of the most tangible forms of the American dream,” said Dandin. “It means independence, having a piece of America. Home is where you raise your children, where you build the balance of your future and where you pass on something greater than what you started with.”
