Why Do VA Loans Exist?

When it comes to the financial security of a veteran, VA Loans have the power to be life-changing. 

These are men and women who have uprooted themselves multiple times to serve our country. In doing so, they didn’t have the same opportunities to build wealth through homeownership that civilians do.

Once the time comes to return to civilian life, veterans have limited resources to settle down into a home of their own. As of WWII, VA Loans helped change that. 

VA Loans Today

Since their development during the final years of WWII, VA Loans have undergone many revisions and improvements to become the benefit they are today. This includes significantly lenient qualifying requirements such as… 

• $0 down payment option
• $0 mortgage insurance 
• Low credit score threshold
• Higher debt-to-income ratio threshold
• Lower interest rates
• Purchase or refinance loans
• Can be used more than once by a single veteran

Compared to a traditional mortgage, you could say it is drastically easier for a veteran to qualify for a mortgage. However, that is not the point of VA Loans. Why do VA Loans exist? Because active duty service members and veterans are at a homeownership disadvantage without them. Let’s look into it. 

On the Move

When being in the service requires you to frequently move around the country, your homeownership journey looks very different. Without being in the home long enough, many active servicemembers ultimately forgo the traditional process of building enough equity to cover the upfront costs of their next home. This is where the $0 down payment requirement of VA Loans comes into play, bridging the gap between duty and achieving homeownership. 

During the Transition  

As servicemembers become veterans, some are tasked with building credit and growing their credit and income as civilians. This is not something that happens overnight, and the VA acknowledges that by offering loans to those with credit scores as low as 580 and higher-than-average debt-to-income ratios. In addition, interest rates on VA Loans can be as much as 0.25% lower than conventional loans, allowing an added layer of affordability on top of accessibility. 

Spread the Word

As real estate professionals, we try to ensure veterans get the homeownership help they need by encouraging our employees and partners to spread the word. If you have a following on social media, post about VA Loans! If you know service members who would benefit, tell them about it! Whichever way you get the word out that VA Loans exist, we’re here to help guide veterans through the seamless process of purchasing their dream home.