Veterans Benefit from Home Loan Guaranty Program

Finally it looks like recent efforts to raise awareness about a program to help our military personnel buy homes has paid off. Five years ago, fewer than 200,000 reached out for this help from the Department of Veteran’s Affairs.

Today that number has grown by 30% — a vast improvement. Yet so many of our country’s heroes still don’t know, or are hesitant about applying for a VA loan.

What Is This Benefit, Exactly?

It’s a Home Loan Guaranty Program, created as part of the GI Bill after WWII. And while the VA doesn’t actually loan any money, it does guarantee part of the loan, which reduces the risk to lenders, enabling them to offer more favorable loan terms to our beloved military personnel and veterans.

And while there’s a perception that it’s for veterans only (probably because of the name) this important benefit is not limited to them. Folks who have served in the military, even for less than a year, and family members may qualify.

Here are a few more interesting facts about our military heroes and VA loans:

• Over half of active-duty military home buyers are between the ages of 18 and 35. Only a third of non-military buyers are able to buy a home at this young age today.
• They marry and have children at a younger age than non-military and, accordingly, tend to buy larger homes.
• They have less student debt and more job stability, most likely because many enter the military before college.
• They default on loans less than non-military. The default rate for VA loans is only about 2.78% vs 3.44% for non-VA loans.

More than 22 million soldiers have benefited from the VA home loan program since its inception. Today, it backs more than 630,000 loans valued at over $153 billion. Seems like a good thing, right?

Tell us what you think about the importance of ensuring that America’s Heroes Have Homes, or email your questions to asktheexpert@shariolefson.com.