Realtor.com® Report Finds VA Borrowers Are More than Twice as Likely as Conforming Borrowers to Have a Low Down Payment

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Nov 11, 2024, 06:00 ET

Stockton, Calif, Des Moines, Iowa and Buffalo N.Y. Are the Top Three Metros Where Military Homeownership Rates Notably Exceed Non-Military Homeownership Rates

SANTA CLARA, Calif., Nov. 11, 2024 /PRNewswire/ -- In honor of Veterans Day, Realtor.com^® released new research today, which found that over the last year, more than 3 in 4 (74.5%) home sales with Veterans Affairs (VA) loans had a 0% down payment and nearly 8 in 10 (83.5% of) VA home loan sales had a down payment below 10%. Down payments are a major barrier to homeownership and this new research found a VA borrower is more than twice as likely as a conforming borrower to have made a low down payment, easing the up-front costs of homeownership.

"Realtor.com^® compared loan characteristics of VA and conforming borrowers to highlight the many advantages that VA loans offer enabling Veteran households and the industry professionals working with them to better grasp the impact that this has on Veteran households and homeownership," said Danielle Hale, Chief Economist, Realtor.com^®. "Despite the significant advantages provided to Veterans with VA loans, according to a survey conducted by Veterans United Home Loans, only 3 in 10 veterans and active-duty service members were aware of the zero down payment benefits of VA loans. With this research, we hope to empower Veteran households with the knowledge and tools they need to make informed decisions about their homeownership goals and financial well-being."

VA Loans Aid Affordability and Boost Homeownership
The advantages of VA loans place military households in a more favorable position than non-military households in today's housing markets. Even though VA loan borrowers often take on a somewhat larger debt, due to a zero or low down payment, the combination of lower mortgage rates and lower fees mean lower monthly payments. For first-time homebuyers making a 0% down payment, a VA loan saves $69 (or 2.7%) per month and $824 per year over a somewhat comparable conforming loan where a borrower puts 8% down upfront.

In 2022, the average homeownership rate for military households in the top 100 metros stood at 77.3%, surpassing that of the non-military population by a significant margin of 8.5 percentage points after adjusting age differences. Among the top 100 metros, Myrtle Beach, S.C. (92.9%) saw the highest homeownership among military households, followed by Des Moines, Iowa (88.8%), Deltona, Fla. (87.5%) and Palm Bay, Fla. (85.8%). Meanwhile, Urban Honolulu, Hawaii (55.1%), San Diego, Calif. (62.6%) and El Paso, Texas (64.7%) saw the lowest homeownership among military households. When looking at the difference between the military and non-military rates of homeownership, Stockton, Calif, Des Moines, Iowa and Buffalo N.Y. are the markets where we see the biggest age-adjusted increase in homeownership for military households.

Markets where Military Homeownership Rates Notably Exceed Non-Military Rates

Metros	Age-Adjusted Homeownership Rate Gap	Homeownership Rate, Military HH	Homeownership Rate, Non-Military HH	Share of Military HH	Share of Sales with VA Loans	Monthly Savings with VA Loans
Stockton, CA	18.8 %	80.9 %	61.7 %	9.8 %	5.4 %	$92
Des Moines-West Des Moines, IA	18.4 %	88.8 %	68.5 %	9.5 %	6.4 %	$58
Buffalo-Cheektowaga, NY	16.7 %	81.9 %	63.9 %	10.6 %	6.6 %	$45
Syracuse, NY	16.4 %	84.4 %	63.9 %	11.7 %	6.9 %	$48
Little Rock-North Little Rock-Conway, AR	15.5 %	78.7 %	60.6 %	14.8 %	14.2 %	$47
Fresno, CA	14.9 %	71.2 %	53.1 %	10.0 %	6.6 %	$75
New York-Newark-Jersey City, NY-NJ-PA	14.7 %	71.5 %	51.3 %	5.6 %	2.0 %	$123
Memphis, TN-MS-AR	14.3 %	79.7 %	57.9 %	11.5 %	9.9 %	$54
Virginia Beach-Norfolk-Newport News, VA-NC	13.4 %	71.6 %	59.3 %	31.5 %	42.3 %	$63
Providence-Warwick, RI-MA	13.4 %	77.8 %	61.1 %	9.9 %	4.4 %	$92

VA loans empower Veteran homeownership by allowing lower down payments and credit scores, along with lower interest rates

An advantage of VA loans is the ability to purchase a home without a down payment. But some borrowers do put money down to reduce their loan's principal balance, and the average down payment percentage for VA loans was 4.6% – significantly less than the average 19.7% down payment percent for conforming loans.
VA loans exhibit flexibility in their credit criteria and this year 23.2% of recent VA loan borrowers had Fair credit scores compared to 4.5% for conforming loan borrowers. For every credit score grouping, recent VA borrowers had lower down payments as a percent of purchase price than conforming loan borrowers.

To bring attention and awareness to the benefits offered to Veterans through VA loans, Realtor.com^® launched in 2023, the #MissionZero campaign which aims to provide essential information and support to those who are serving or have served our nation, helping them achieve their dreams of buying a home. The campaign aims not to end until every Veteran and service member knows the power of what they've earned.

More information can be found at realtor.com/veterans as well as in the Veterans & Military Benefit section of for-sale home listings on Realtor.com.

Real estate professionals interested in joining the mission to help all Veterans and their families achieve the dream of homeownership, can visit www.realtor.com/veterans#resources and toggle to For Agents to find shareable resources including a video, social images and copy, and articles.

Methodology:
Mortgage information including loan types, down payment, credit scores, mortgage rates and VA loan share are all sourced from Optimal Blue. For the purpose of this research, we only focus on 30-year fixed rates loans that are used to purchase primary residences between October 2023 and September 2024.

For the purpose of this research, a household is considered a military household if any member in the household is on active duty or has a veteran status. The number of military households is derived from 2022 ACS 1-Year individual data. To estimate the homeownership rates among military households, we first calculate the rates for three age groups (18–34, 35–54, and 55-plus) and then take a weighted average across these groups. To get the homeownership rate gap between military and nonmilitary households, we first calculate the homeownership rate gap for each age group (18–34, 35–54, and 55-plus) and then take a weighted average across these groups, based on their proportion among all households.

About Realtor.com^®Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

About Veterans United Home Loans
Based in Columbia, Missouri, the full-service national lender financed $18 billion in loans in 2023 and is the country's largest VA lender, according to the Department of Veterans Affairs Lender Statistics. The company's mission is to help Veterans and service members take advantage of the home loan benefits earned by their service.

VeteransUnited.com | 1-800-884-5560 | 550 Veterans United Drive, Columbia, MO 65201 | Veterans United Home Loans NMLS # 1907 (www.nmlsconsumeraccess.org). A VA approved lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. Licensed in all 50 states. For State Licensing information, please visit http://www.veteransunited.com/licenses/. Equal Opportunity Lender.

Media Contact
Mallory Micetich, [email protected]

SOURCE Realtor.com