Later this month the VA home loan guaranty program will turn 70 years old. Since its enactment in 1944, under the Servicemen’s Readjustment Act, the VA loan has transformed into a benefit that truly serves VA buyers.

In fact, the VA backed nearly 630,000 mortgages in fiscal year 2013, an all-time record. That’s a 370 percent increase from FY 2007. And, over the 70-year life of the program, it’s helped veterans obtain financing on more than 20 million homes.

VA Loan Benefits

The VA mortgage guaranty program offers multiple benefits to veterans, service members and their families.

One benefit that makes homeownership a possibility for many veterans is no down payment. Many veterans lack the savings necessary for a down payment on a home. In 2013 VA buyers had a median of $8,670 in assets. The VA mortgage allows 100 percent financing, giving veterans who wouldn’t otherwise qualify the opportunity for a piece of the American Dream – owning their own home.

The Department of Veterans Affairs doesn't specify a minimum credit score. But frequently the lenders offering VA mortgages require a 620 credit score for qualification. That’s much lower than FHA and conventional financing credit cutoffs. For many, the VA loan may be their only option for 30-year fixed-rate financing on a home.

Another savings offered to VA buyers is the lack of mortgage insurance. This can save the VA buyer a significant amount monthly and over the course of their mortgage. Veterans securing VA financing last year alone will save $19 billion over the life of their loans.  

Mythbusting

Some agents believe VA buyers only purchase inexpensive homes or that they can’t afford homes in their particular market. VA buyers are diverse in their financing abilities just like conventional buyers.

In 2013, the average VA loan amount was $234,622, allowing the purchase of a sizeable home in many parts of the country.

Another common misconception is the VA appraisal process is too difficult or takes too long.

The VA appraisal features additional standards called Minimum Property Requirements. These MPRs were created to ensure the VA buyer purchases a home that is safe, sanitary and structurally sound. By ensuring the home meets these requirements the VA protects the veteran buyer and their family from costly expenses and repairs down the road that could lead to financial hardship. Guide your VA buyers toward move-in ready homes and you’ll have minimal issues. If they go under contract on a home that does require repairs they can now pay for some repairs if necessary.

What You Can Do

VA loans are booming. Start serving those who serve by asking every buyer, “Did you serve?” Identify who’s eligible for the VA mortgage guaranty program and connect them with a lender specializing in VA loans.

A VA mortgage specialist can explain to your buyer the great benefits that come with the VA loan. It may not be the best option for every veteran or service member, but it is for many. By informing them of these benefits you give them the tools necessary to choose the best mortgage product for their circumstances.

If you have any questions about the VA loan, I’d be happy to help. Email me anytime at This email address is being protected from spambots. You need JavaScript enabled to view it.