70 Years of VA Home Loans and Going Strong

Tim Lucas
Military VA Loan editor

In 1944 the United States government established a unique program that allowed returning World War II veterans to buy homes and set down roots.

Seventy years later, over 20 million VA home loans have been issued to veterans and active duty service members. The VA lending program has been one of the most successful of VA benefits. Countless families own their homes because of the VA loan.

Veterans are often surprised at the low rates and tremendous advantages this loan type offers. Unlike other loans, the VA loan requires no down payment, no mortgage insurance, and lower minimum credit scores. The VA home loan offers homeownership to those who might not qualify for a mortgage otherwise. Here are just of the few advantages that come with the VA loan program.

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VA Loan Rates: A History of Affordable Homes

Mortgage rates are lower for VA loans than for many other loan types. This provides lower monthly housing payments to veterans. In many cases, it is more expensive for veterans to rent than to buy.

Low VA rates are possible thanks to a government guarantee. The VA will reimburse lenders if the borrower defaults on the loan. The guarantee reduces the risk of lending money. The lower risk translates to lower rates.

A lower rate can make the difference when qualifying to buy a house. Homebuyers are often just slightly above the maximum debt ratio, and a lower rate can help get them to an acceptable range.

And, a lower rate means qualifying for a larger home. Finding a home with an extra bedroom can save the expense and hassle of moving as the family grows. Just a 1% reduction in interest rate boosts buying power by 11%. The VA loan helps veterans qualify for more home with less money.

VA Loans: No Down Payment Needed

After 70 years, the VA home loan is probably best known for what it doesn’t require: a down payment.

Traditional lending requires borrowers to make a 20% down payment. Even the popular FHA program requires 3.5% down. On a $250,000 home purchase, a home buyer would need $8,750 and up to $50,000 to qualify for the loan.

But VA loans require nothing down. This special VA allowance helps veterans buy now, instead of struggling for years to save enough money.

The no-down-payment rule is even more helpful in a rising home price environment like many parts of the country are experiencing.  Veterans would have a hard time saving up for a down payment with 5% to 10% yearly appreciation. As home prices rise, so would the down payment.

VA home loans allow buyers to buy now, and use home appreciation to their benefit.

Click here for today’s rates and to request pre-approval.

Here’s to 70 More Years of VA Loans

The VA loan program has gained in popularity in recent years. In 2013, some 630,000 veterans took advantage of the benefit. The increased use of the benefit does not put the program at risk, however.

The VA home lending program is self-sustaining. It has one of the lowest default rates of any loan type. It does not require tax payer subsidies at all, nor does it take up funds from other VA benefit programs. In fact, it pumps money back into the Veterans Administration.

Veterans should feel great about obtaining a VA loan. The more it is used, the more secure the program becomes for future generations. Buying or refinancing a home with a VA loan is a good decision – for more reasons than attaining the goal of homeownership.

Check Today’s VA Loan Rates

All home loan rates are very low, and it’s especially true for VA loan rates. Locking in a low VA fixed rate now means up to 30 years of low payments on your home. The rate never changes.

Request a pre-approval and check today’s rates. Buying a home is a great decision today and for the future.

Click here to check today’s low VA rates.