CFPB: More Servicemembers Use VA Loans For First-Time Homebuying


The Consumer Financial Protection Bureau (CFPB) disclosed in a report on Friday (March 1) that there has been an increase in active duty service members and veterans applying for first time homebuyer loans at least partially guaranteed by the U.S. Department of Veterans Affairs (VA).

The report is titled “Mortgages to First-time Homebuying Servicemembers.”

The CFPB found through research — marking the first time it has been able to analyze such mortgage choices — that the share of first time of first-time homebuying servicemembers using VA mortgages increased from 30 percent before 2007 to 63 percent in 2009. In 2016, 78 percent of servicemember loans were VA loans.

The CFPB also said the median loan amount for first-time homebuying servicemembers with a VA loan increased — as measured in nominal dollars —from $156,000 in 2006 to $212,000 in 2016.

The Bureau said this trend was one that closely tracked the median value of conventional home loans taken out during the period by non-servicemembers.

In looking at non-VA loans, measured again in nominal dollars, for servicemembers who opted for conventional or FHA/USDA mortgages, the CFPB said such lending was lower in value compared to VA loans.  The rise showed a slower pace of gains, growing from $130,000 in 2006 to $150,000 in 2016.

“The greater share of VA loans among servicemembers was part of a larger shift among consumers (both servicemembers and non-servicemembers) away from conventional to government-guaranteed mortgages between 2006 and 2009,” said the CFPB in a statement.

VA-guaranteed home loans let borrowers buy their homes with no down payment and also with no mortgage insurance.

The data show that conventional mortgages — that is, non-government-guaranteed mortgages — were about 60 percent of loans among first-time homebuying servicemembers in 2006 and 2007.

The CFPB said that this share of conventional mortgages declined to 13 percent by 2016.

By comparison, the conventional loan share among non-servicemembers fell from almost 90 percent before 2008 to 41 percent in 2009, then increased back to 60 percent in 2016, said the Bureau.


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 AML/KYC Report, Zillow’s Justin Farris tells PYMNTS how the platform incorporates stringent authentication without making the onboarding and buying experiences too complex.