The VA home loan program has a record of success since its inception in 1944. In fiscal year (FY) 2021, VA set a home loan program record by guaranteeing more than 1.4 million loans. As interest rates have risen and other market forces have constrained buyers’ ability to close loans, the VA guaranty has proven even more essential in helping veterans obtain housing. However, myths about the VA home loan program may discourage veterans from utilizing their home loan benefit.
Myth #1: They Take Too Long
For example, veterans hear that VA appraisals take too long and delay loan closing. In actuality, between Oct. 1, 2021, and May 31, 2022, VA origination appraisal timeliness averaged 9.7 business days across the United States, making VA-guaranteed mortgages competitive with every other industry loan type.
Myth #2: It Can Only Be Used Once
Another myth is that veterans may only use their VA home loan benefit once. However, it is a lifetime benefit. Eligible borrowers may use the program multiple times, provided they are able to retain or restore loan entitlement.
Myth #3: It Doesn’t Save You Much $$
The VA guaranty offers enormous cost savings for borrowers. Veterans regularly obtain competitively low interest rates and do not pay Private Mortgage Insurance (PMI) on VA-guaranteed loans, resulting in hundreds of dollars saved on monthly mortgage payments. Finally, VA limits the fees and closing costs that lenders can charge on the loan. This means even more savings for veteran borrowers throughout the terms of their mortgages.
Veterans should never let anyone talk them out of using their VA home loan benefit, and VA strongly encourages all prospective veteran homebuyers to shop around to multiple lenders to ensure they receive the best loan terms available. Furthermore, VA is always standing by to speak with veterans who may have questions about their home loan benefit or provide personalized assistance to existing veteran borrowers experiencing financial distress that results in difficulty paying their mortgages.
For more information on the VA home loan guaranty, please visit benefits.va.gov/homeloans/index.asp, or veterans can speak to a Loan Guaranty team member by calling 1-877-827-3702.