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Since its launch in 1944, the VA loan program has helped 28 million people achieve homeownership. The program just celebrated its 80th anniversary on June 22, 2024. To honor our Veterans and service members, we’re taking a closer look at the value of VA loans and their influence on home financing.
The VA loan has helped generations of Veterans, service members, and military families build wealth and create homes within their communities. The original goal of the program still rings true: to help military members successfully transition to civilian status by creating homeownership and wealth opportunities they may have missed during active duty.
The National Association of Realtors (NAR) published an article in June 2024 that analyzed the continued historic benefits of the VA loan program to continue our understanding of the benefits, misconceptions, and the effects the VA loan has had on American housing.
The VA loan program has contributed $3.9 trillion to our nation’s economy since its creation. It has stayed strong through various market changes, from the housing boom post-World War II and through the Great Recession in the early 2000’s. In 1947, three years after its launch, VA loans accounted for more than $3 billion in loan volume. In 2021, the volume surpassed $447 billion, proving its continued support for qualifying service members and their dreams of homeownership.
According to studies by Veterans Affairs and the NAR, 93% of Veterans and service members have used a VA loan to purchase their first home, with close to 80% made by buyers who were 34 years or younger using the benefit for the first time. Since 2019, almost one million Millennials have used their VA home loan benefit.
In a report examining 2023 generational homebuying habits, the NAR found that Millennials were 38% of all purchases. This percentage drops significantly for Gen Z, with just 3% purchasing homes last year. However, 60% of all 2023 VA purchases were made by Millennial and Gen Z buyers.
Veterans and service members say the VA loan program has helped improve their financial future, with over two thirds of Veterans from a study believing the program helped them build strong credit and 90% agreeing that VA loans make homebuying affordable.
The VA program has also adjusted the nation’s perspective on the security and value of low- and no-down payment mortgages. As housing prices and interest rates maintain their growth post-COVID-19, many homebuyers are letting go of the myth that a 20% down payment is required for a mortgage. In the last 15 years, VA loans have had a low foreclosure rate, even though 80% of buyers in the program purchase without putting money down.
Despite the great benefits of the VA loans, 75% of Veterans believe at least one myth about the program.
Almost a quarter of service members believe VA loans cost more than other mortgage loans. However, the program can be used with no down payment, no monthly mortgage insurance, and limits on closing costs. In addition, borrowers can ask a seller to pay all their loan-related closing costs and up to 4% in concessions, helping to ease pain points like prepaid taxes or insurance.
Nearly half of Veterans believe the government sets mortgage interest rates. Even though the VA loan is a government-backed program, the loan rates are set by private lenders. According to data from Ellie Mae, VA loans have had the lowest average fixed rate for more than six years when compared to other home financing programs.
Many believe the VA loan can only be used once. However, Veterans who qualify for a VA loan can use the program repeatedly through their Lifetime Benefit. If they have already paid off their loan in full, a borrower has their full VA entitlement restored to use for another purchase.
Homestead Funding is proud to assist Veterans and service members with their dreams of homeownership.
Along with the many Loan Originators that serve our VA borrowers, Michael Santulli and Patrick Wolf have been assisting Veterans with homeownership through Homestead Funding since 2008. Since then, they have helped thousands of Veterans finance their homes.
“We cannot begin to explain what an honor it has been to have heroes as clients,” Patrick shared. “Watertown and the armed forces share a unique web of involvement. Along with military members in active duty, there are service members who have remained once their active duty is complete. There are also real estate agents that are personally connected, whether as former active-duty members or as family members to those that serve, with whom we are proud to call our business partners. I fell in love with serving those that give everything to our country, so much so that I relocated to the region and call it home myself.”
Michael agreed. “We love the word ‘service’. We pride ourselves on the experience to make this transition for Veterans as easy and cost effective as we can. It takes a special person to put themselves in harm’s way for the benefit of others. Our response is service to them in return.”
To learn more about our VA program and our other home financing options, contact us today!
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.
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