Veterans are missing out on billions in VA loan benefits

Tens of thousands of veterans are missing out on the benefits of U.S. Department of Veterans Affairs (VA) home loans each year, with billions of dollars in potential mortgage volume left untapped, according to a new analysis from Veterans United Home Loans.

The report found that more than 58,000 VA loans went unused in 2024, representing nearly $28 billion in potential loan volume.

The analysis compared how often veterans use their VA home loan benefits across local housing markets versus the national level while adjusting for each metro’s veteran population.

Despite the VA loan’s increased popularity since the Great Recession, the report found that usage remains inconsistent and, in many markets, disproportionately low.

“Even in some of the country’s most competitive and expensive housing markets, thousands of veterans might be missing out on the advantages of this benefit,” said Chris Birk, vice president of mortgage insight at Veterans United Home Loans.

“Our study underscores the need for greater awareness of the benefits of the VA loan. A stronger focus on education and access could make a meaningful difference for veterans and their families.”

High-cost markets lead in missed opportunities

The metros with the greatest underutilization of VA loans were Barnstable Town, Massachusetts; San Jose; and Naples, Florida.

The report said these areas share similar characteristics, such as high home prices, elevated median incomes and smaller veteran populations — a combination that can make homes less affordable and the VA loan program less visible to both buyers and real estate professionals.

In many of these markets, household incomes exceed the national median of $65,044, while listing prices far outpace the national median of $342,000. This imbalance can limit a veteran’s ability to compete with conventional buyers, Realtor.com said.

Metropolitan areas such as New York, Los Angeles and Boston each exceeded $1 billion in lost VA loan volume, according to estimates.

These higher-cost markets already face affordability challenges, amplifying the potential impact of unused VA loan benefits.

Lower-cost markets also affected

Not all of the underutilized markets are expensive coastal cities.

Smaller, lower-cost metros such as Glens Falls, New York; Lancaster, Pennsylvania; and Waterloo, Iowa, also ranked among the top 25 for missed VA loan opportunities.

Analysts attributed this to smaller veteran populations and lower overall loan volumes, which can lead to fewer local lenders and agents who are familiar with VA loan processes.

Nationally, VA loans accounted for about 10% to 12% of the mortgage market in recent years, but that figure dropped to about 8% in 2024, according to federal Home Mortgage Disclosure Act data.

Rising mortgage rates and reduced affordability were major factors cited in the decline.

Misconceptions persist

The analysis also pointed to lingering misconceptions about VA loans, particularly in competitive markets where sellers often prefer fast, conventional financing.

Some veterans may avoid using the VA benefit out of concern that sellers or agents view it as a more complicated process.

The report noted that VA loans offer significant advantages — including no required down payment and no private mortgage insurance.

Sellers can also pay all buyer closing costs and contribute up to 4% in concessions, while typical closing timelines match those of conventional loans when VA-specific steps are completed early.