Bringing Awareness to VA Home Loan Benefits

With Veteran’s Day upon us, many vets nationwide are aware they have access to Veterans Affairs (VA) home loan benefits, which honor their service by making homeownership more accessible.

However, a new report from Realtor.com has found that just three in 10 know they can use that benefit to buy a home with a zero down payment, according to a poll of U.S. vets and active duty servicemembers.

A joint effort launched between Realtor.com, the New York Post, Wall Street Journal, along with the Tunnel to Towers Foundation, the Veterans of Foreign Wars, and Veterans United Home Loans, the #MissionZero campaign aims to make sure every veteran and servicemember knows their VA loan benefit helps them buy with 0% down. The #MissionZero campaign aims to provide essential information and support to those who are serving or have served our nation, helping them achieve their dreams of buying a home. The campaign aims not to end until every veteran and servicemember knows the power of what they've earned.

"VA home loans offer many benefits, especially at times like this when affordability is such a major factor in home purchase decisions. Yet only a small portion of eligible veterans are tapping into the financial benefits they deserve for their service," said Damian Eales, CEO at Realtor.com. "At Realtor.com, the #MissionZero campaign was born out of the belief that nothing should stand in the way of homeownership, especially a down payment. We owe it to our veterans to ensure they have the information they need to make informed housing decisions. It's a small way to give back to those who have given so much, and we appreciate our partners for joining us in the cause."

Realtor.com's report found the homeownership rate for veteran households, according to the latest available data, was 79.7%, significantly surpassing that of non-veterans, 63.5%. Additionally, data shows homeownership rates for veterans are higher than non-veterans in all of the top 100 metros.

Realtor.com also found that over the last year, while three in four VA loans had a 0% down payment (75.2%), some borrowers do put money down to reduce their loan's principal balance, and the average down payment percentage for VA loans was 2.7%–significantly less than the average 19.1% down payment percent for conforming loans.

"After nearly eight decades of helping veterans and military families buy homes and build generational wealth, the VA loan benefit is more important than ever," said Nathan Long, CEO of Veterans United. "The #MissionZero campaign helps highlight how VA loans are built to eliminate obstacles and make homeownership more accessible for those who serve. At the same time, they also offer veterans the freedom to choose how and where they invest their savings."

Data on VA loans shows a greater share of issuance to those with less than perfect credit compared to other loans, making homeownership possible to a wider net of borrowers. In the past year, approximately 24.8% of home buyers with VA loans fell into the fair credit score category (580-669), compared to 4.7% among conforming loan borrowers.

U.S. Sen. Sherrod Brown, Chair of the Senate Committee on Banking, Housing, and Urban Affairs, and Sen. Mike Braun, recently introduced new legislation, the VA Home Loan Awareness Act of 2023, to help inform veteran homebuyers of their eligibility for the VA Home Loan Program.

The VA Home Loan Awareness Act of 2023 adds a disclosure to the standard mortgage prequalification application (Uniform Residential Loan Application) to inform veterans that they may qualify for a VA Home Loan. Because this form was recently updated in March 2021 to include a section for military service information, this bill would only add an additional line to that section informing veterans of this critical benefit.

“By letting veterans and servicemembers know they may be eligible for a VA home loan, we can help make the dream of homeownership a reality for more military families and make sure that the Ohioans who have served our country get the benefits they’ve earned,” said Sen. Brown.