More and more veterans are using these flexible, $0 down loans to crack the housing market during a time of tight credit and limping wages. A good year for the industry was a great one for military buyers: VA purchase loans surged 19% year over year, according to recently released figures.
The outlook for this 71-year-old benefit program is bright, too. The population of younger veterans is expected to increase 36% over the next five years, according to a recent Deutsche Bank analysis. To be sure, VA loans aren’t the right fit for every veteran. But they’re also no longer on the sidelines. In fact, in many ways, these government-backed loans are arguably the most powerful residential loan product on the market.
Greater awareness of the benefits—and the surprising safety—of VA loans has propelled market share in recent years. Credit guidelines for VA loans are generally more forgiving compared with conventional loans, and VA buyers don’t have to spend years scraping up a down payment. That one-two punch helps make homeownership possible for scores of veterans and military families who might otherwise miss out. The average VA buyer has about $7,000 to $8,000 in assets, according to the VA. These loans also carry no mortgage insurance and limit what buyers can pay in closing costs.
Source: Realtor.com
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