VA-backed mortgages see rising share as housing costs pressure buyers

VA-backed mortgages are gaining traction as higher home prices and mortgage rates tighten affordability for buyers. An analysis of county records in 40 major U.S. metro areas showed that VA loans represented 7.7% of mortgaged home purchases in March, the highest March share since 2020 and an increase from 6.8% a year earlier. The Department of Veterans Affairs backs these loans, which are issued by private lenders and typically require little or no down payment and no private mortgage insurance.

Despite the growing use of the program, a Rocket Mortgage survey of more than 1,100 active-duty service members, veterans and their spouses found that 59% were aware of VA loans, yet fewer than half said they had used or intended to use one. Only 16% reported familiarity with state-specific veteran housing resources.

"When I left the military, all the focus was on VA health care and making sure we went through the right steps to get the health care we needed and the disability rating we needed," said Ryan Dandin, a former Army cryptologic linguist now with Rocket Mortgage. "There was probably a footnote about VA home loans, but it wasn’t the main focus."

Dandin explained that the loan helped his family transition from temporary military housing to a permanent home in Michigan, noting that many veterans may assume they do not qualify or that homeownership is out of reach. He urged service members to explore the option before dismissing it.

"Go for it! At least try," added Steven Mohler, an Army Reserve veteran who refinanced through a VA loan and secured a low mortgage rate on his Arizona home.

The increase in VA loan usage comes as eligible veterans, active-duty members and surviving spouses seek ways to lower the upfront costs of buying a home amid a challenging housing market.