VA's Home Loan Program Continues to Lead Mortgage Industry
Recently, the Department of Veterans Affairs announced it has guaranteed 20 million home loans since its home loan program was established in 1944 as part of the original GI Bill of Rights for returning World War II Veterans. The 20 millionth loan was guaranteed for a home in Woodbridge, Va., purchased by the surviving spouse of an Iraq War Veteran who passed away in 2010.
Given the current low interest rates, the program has grown significantly in the past five years, with 71 percent more purchases and 20 times as many refinances processed in fiscal year (FY) 2012 than in FY 2007. Currently, there are 1.7 million VA guaranteed home loans in existence with a total value of $284 billion. VA has guaranteed 540,000 mortgages in 2012.
“The 20 millionth VA home loan is a major milestone and is a testament to VA’s commitment to support and enhance the lives of Veterans, Service members, their families and survivors,” says Allison A. Hickey, VA’s undersecretary for Benefits. “As a result of their service and sacrifice, as a group, they prove to be disciplined, reliable, and honorable—traits that are ideal for this kind of national investment.”
The program makes home ownership more affordable for eligible Veterans, Service members, and surviving spouses by providing access to lower cost financing. VA loans are also attractive within the mortgage industry because they protect lenders from loss if the borrower fails to repay the loan.
Mortgages guaranteed by VA have had the lowest foreclosure rate for the last 17 quarters and the lowest delinquency rate for the last 14 quarters compared to all other types of home loans in the nation, including prime loans, according to a report by the Mortgage Bankers Association.
Much of the strength of VA’s home loan program stems from the efforts of VA employees and its industry partners nationwide to ensure Veterans receive every possible opportunity to remain in their homes and avoid foreclosure. Since 2009, VA’s efforts have resulted in over $8 billion in savings to taxpayers in foreclosure avoidance.
Veterans may obtain a certificate of eligibility for a VA-guaranteed home loan through the joint Department of Defense—VA web portal eBenefits at www.ebenefits.va.gov.
To obtain more information about the VA Home Loan Program, visit the program’s home page at www.benefits.va.gov/homeloans.