Fewer than half of all eligible service members consider a loan backed by the Department of Veterans Affairs (VA) when thinking of buying a home, according to a new study—but they are missing out on significant savings by ditching this option, experts say.
The reason why so many ignore VA loans might be because they are not aware of the advantages this type of loan offers. According to fintech and homeownership services company Rocket Companies, only 54 percent of eligible service members know VA loans require no down payment.
And just 39 percent are aware that they do not require private mortgage insurance (PMI), something which saved borrowers a median of $10,600 in 2025 compared with a similar conventional loan with PMI.
These savings can make the difference for service members between being able to afford a home or not, according to Rocket. “For millions of veterans and military families, the path to homeownership is not restricted by a lack of demand, but by gaps in awareness,” Eileen Tu, Vice President of Product Development at Rocket Mortgage, said in a statement.
What Are VA Loans?
VA-backed home loans is a mortgage guaranteed by the Department of Veterans Affairs and issued by private lenders.
It is designed to help active-duty service members, veterans, and eligible surviving spouses purchase or refinance homes, offering terms such as zero down payment requirements, lower rates, limited closing costs and no PMI, unlike conventional mortgages.
Who Can Apply For Them, And How?
VA loans are available for homes that will be occupied by the service member or their spouse and/or dependent, in the case of active duty service members.
To be eligible, service members must have served for at least 90 continuous days without a break in service and meet the minimum active-duty service requirement; veterans must meet the minimum active-duty service requirements depending on when they served.
Different, more specific requirements are set for National Guard members and Reserve members.
Applicants must also have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE) showing their lenders they qualify based on their service history and duty status.
How Can They Help Active-Duty And Former Service Members?
A VA loan can be used to buy a single-family home, up to 4 units; buy a condo in a VA-approved project; buy a home and improve it; buy a manufactured home or lot; build a new home; or make changes or add new features (like solar power) to make a home more energy efficient.
“With zero down payment, VA loans address some of the most challenging financial hurdles active and retired military home buyers face,” Tu said.
“That combination can significantly reduce both upfront costs and monthly payments by thousands of dollars, making homeownership more achievable for millions of Americans. In 2025, 70 percent of VA purchase loans were made with no down payment,” she added.
In some parts of the country, eligible service members seem to be taking more advantage of VA loans. In Tampa, Florida, which is home to more than 20 military bases, roughly 40 percent of homebuyers used VA financing from 2023 to 2025.
In Portland, Oregon, where the Portland Air National Guard Base is located, VA-backed purchases have increased from near zero in the early 2010s to more than 6 percent of home sales today, Rocket found.
What Comes After?
Obtaining a VA-backed loan and buying a home, however, is only half of the story for many veterans—and not one with a “happily ever after” ending.
More than 10,000 veterans lost their homes to foreclosures since May 2025, when the Department of Veterans Affairs (VA) ended a major foreclosure prevention program, according to industry data cited by NPR.
Between 2021 and 2022, at the peak of the COVID-19 pandemic, the VA offered a partial claim option to help struggling borrowers catch up on missed payments. It also temporarily introduced the Veterans Affairs Servicing Purchase program (VASP), which purchased delinquent loans from servicers and modified them at a 2.5 percent fixed rate.
That program ended on May 1, 2025, when it stopped taking new applicants—with significant consequences. The pace of foreclosures for VA loans reported in the past 12 months is the highest in a decade, NPR wrote.
Troubles are far from over, as another 90,000 veterans are heading toward foreclosure as they are seriously delinquent, NPR reported.
A spokesperson for the VA told Newsweek: “VA programs saved 173,000 Veterans from losing their homes last year, and VA programs typically help about 100 to 200k Veterans each year.
“The number of Veteran foreclosures NPR reported is in line with many recent years and is actually lower than many of those years in which VASP was not in effect.”
President Donald Trump signed a new bill into law last year, the VA Home Loan Program Reform Act, in an attempt to help veterans facing the loss of their homes.
Under the law, the VA can advance funds to cover a veteran’s missed VA loan payments and bring the loan current. That amount becomes a subordinate lien attached to the property, with no monthly payment required. Veterans repay it only when they sell, refinance or pay off the mortgage.
The program allows the VA to cover up to 25 percent of the veteran’s loan balance, or 30 percent for borrowers who have already used a COVID-era partial claim. It applies to primary residences already in default or at imminent risk of default.
Crucially, borrowers are able to keep their original mortgage terms. Those who secured rates as low as 2.5 percent or 3 percent during the pandemic do not have to refinance into today’s much higher rates—a huge difference.
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