VA-backed home loans accounted for 7.7% of all mortgaged home purchases in March, the highest March share in a decade, according to a Rocket Mortgage and Redfin analysis of county records across the 40 largest U.S. metropolitan areas. The figure was up from 6.8% a year earlier.

VA loans are mortgages backed by the U.S. Department of Veterans Affairs and issued through private lenders. They typically require little to no down payment and do not require private mortgage insurance, making them an attractive financing option for eligible veterans, active-duty service members and surviving spouses.

Housing Costs Push VA Loan Demand Higher

The report said rising affordability pressures and a buyer’s market have made VA loans increasingly attractive. With sellers facing softer demand, buyers using low-down-payment financing are finding it easier to have their offers accepted. VA loans also generally carry lower mortgage rates than conventional mortgages, helping reduce monthly payments.

“VA loans are one of the most powerful tools available today, especially in a market where affordability remains a challenge for many house hunters,” Bill Banfield, chief business officer at Rocket, said in the report. He added that the loans can help military families move from renting to building long-term wealth through homeownership.

Awareness Gap Remains

Despite growing adoption, awareness remains limited. A January Rocket Mortgage survey of more than 1,100 active-duty service members, veterans and their spouses found that 59% were familiar with VA loans, but fewer than half had used or planned to use one. Only 16% said they were familiar with state-specific veteran housing resources.

The report also found VA loans were most common in markets with large military populations, including Virginia Beach, Virginia, Jacksonville, Florida and Washington, D.C. Meanwhile, FHA loan usage declined to 13.8% of mortgaged home purchases in March from 15.1% a year earlier, while conventional mortgages continued to account for nearly four in five home purchase loans.

Former U.S. Army cryptologic linguist Ryan Dandin, who now works at Rocket Mortgage, said the benefit helped his family transition from temporary military housing to a permanent home in Michigan. Dandin told Fox Business that many veterans focus primarily on healthcare and disability benefits when leaving the military and may overlook VA home loans or assume they cannot qualify. He said homeownership gave his family stability and encouraged eligible veterans to explore the program before ruling it out.

Former Army Reservist Steven Mohler shared a similar experience, telling Fox Business that refinancing through a VA loan helped him secure a low mortgage rate on his Arizona home. He encouraged other eligible veterans to apply, saying, “Go for it! At least try.”

The findings come as affordability continues to weigh on the U.S. housing market. Last week, the Mortgage Bankers Association said mortgage demand remained largely unchanged as elevated borrowing costs discouraged buyers from taking on riskier adjustable-rate mortgages.

Separately, government data released in June showed U.S. housing starts fell to their lowest level since 2020, highlighting continued weakness in residential construction and housing supply.

Housing affordability has also become a growing policy focus in Washington. Congress recently advanced the bipartisan 21st Century ROAD to Housing Act, legislation designed to boost housing supply, expand access to smaller mortgages and improve affordability through measures including faster environmental reviews and support for prefabricated housing.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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