VA Loan Foreclosure Rates

VA loans have helped millions of veterans and active duty military achieve the dream of home ownership. But these flexible, low-cost loans are also the nation’s best lending program when it comes to keeping people in their homes.

VA loans have the lowest foreclosure rate of any home loan on the market, according to the Department of Veterans Affairs.

“The dedication of VA’s loan professionals, the support of our partners in the mortgage industry and most importantly, the hard work and sacrifice of our veterans have made this possible,” Secretary of Veterans Affairs Eric K. Shinseki said in news release issued on Dec. 7, the 68th anniversary of the attack on Pearl Harbor. “VA is making good on its promise to help veterans buy homes, and veterans are achieving their dreams.”

The increasing security of VA loans comes amid a boom year for this government-guaranteed lending program, which has helped more than 18 million veterans become homeowners since 1944. The VA guaranteed more than $68 billion in single-family loans for the fiscal year ending Sept. 30, an 80-percent increase from last year.

The VA’s success in the face of rampant foreclosure is all the more staggering considering its signature benefit — qualified veterans can purchase a home without putting down a single dollar. In fact, more than 90 percent of VA loans are made without a down payment.

VA loans come with a host of significant benefits for veterans, active military and their families, including:

• No private monthly mortgage insurance

• No penalties for loan pre-payment

• Higher debt-to-income ratio allowed than for most conventional loans

• Sellers can pay up to 6 percent of closing costs

VA loans are often more accessible for military home buyers than conventional financing. About 80 percent of VA borrowers would not have qualified for conventional loan options.

But people interested in serving those who served are a major reason why VA loans continue to thrive and help protect military buyers, said Secretary Shineski, who credited VA employees and loan servicers across the country for helping keep veterans in their homes.

This guest post was written by Brandon Laughridge of Mortgage Loan Place.  MLP specializes in teaching consumers about government loan programs such as FHA loans and VA loans.