After serving this country, it may come as no surprise to many that veterans desire homeownership, like most Americans, and the majority are already aware of the VA house loan advantage. A new survey by NewDay USA revealed the opportunities and benefits veterans desire, as well as the missing pieces to attain them.
That may come across as significantly positive news for anyone involved in the veteran homeownership industry. While there is already a significant level of awareness, thousands of qualified veterans nationwide may not even be aware of how close they are to the American Dream.
According to a survey of veterans, some 63% of them are aware of the VA home loan benefit. Until you take a closer look, the figure seems impressive. During or after their military service, nearly one in three (32%) reported having little to no knowledge regarding their VA home loan benefits. Additionally, some 30% are not clear if they are eligible for the benefit at all.
- Only 32% knew that a VA loan requires no down payment
- Approximately 30% incorrectly believed a down payment is required
- Roughly 38% said they were simply unsure
Further, regarding private mortgage insurance (PMI), there was even greater ambiguity:
- Just 23% understood that VA loans do not require PMI regardless of down payment
- Some 30% believed PMI is required
- An estimated 47% said they had no idea either way
This misconception can cost veterans between $100 and $300 each month for as long as it takes to acquire 20% equity if they took out a conventional loan instead of the VA loan because they believed PMI was inevitable. The Basic Allowance for Housing (BAH) can be used to determine income eligibility for a VA loan, according to 42% of respondents. However, an estimated 19% mistakenly thought it couldn’t be counted at all, and 39% were unsure.
BAH can make up a sizable amount of total income for veterans who have just been separated or active-duty military personnel. Someone may think they make less money than they actually do for loan purposes if they are unaware that it qualifies.
Common Veteran Misconceptions, Worries & More
There are several myths that prevent eligible veterans from becoming homeowners across the country.
No. 1: Needing a down payment to utilize a VA loan:
This is the data’s most significant misinterpretation, according to the report. Although individual lenders may have their own overlays, eligible Veterans can buy a home with $0 down payment thanks to the VA home loan guarantee.
When asked how much money they believed they would need to use a VA loan to purchase a home:
- 19% said they were unsure
- 17% estimated $10,000 to $19,900
- 9% correctly answered none
That may explain why some 49% of Veterans in the same survey said that homeownership is currently unattainable is largely explained by these figures.
No. 2: VA loans require private mortgage insurance:
When a borrower puts less than 20% down on a conventional loan, PMI is required. PMI is not required for VA loans at any level of down payment. The insurance that PMI would normally offer is replaced by the VA’s guarantee to the lender. For qualified borrowers, the VA is an affordable mortgage alternative just because of this benefit.
No. 3: VA loans take longer to close:
According to the NewDay USA poll, approximately 29% of veterans said VA loans took longer to process than other kinds of mortgages, with analysts citing that this particular view is out of date. The majority of VA loans close in a timeframe similar to that of traditional finance.
No. 4: BAH cannot be used to qualify for a mortgage:
Because BAH is tax-free income, lenders who are aware of VA regulations will frequently gross it up when determining qualified income, so raising its worth during the underwriting process. If veterans and service members are uncertain about how their income will be assessed, they should speak with their lender directly about how BAH, disability benefits, and other kinds of income unique to the military are handled.
- 42% knew BAH can count toward income qualification
- 39% were unsure
- 19% incorrectly believed BAH cannot be used to qualify
While there are some expenses homebuyers should be aware of, the VA home loan program does not require a down payment, upfront mortgage insurance, or monthly mortgage insurance. However, borrowers with VA loans should anticipate regular closing charges in addition to the funding fee, which may include:
- The VA appraisal
- Credit report
- State and local taxes
- Title fees
- Real estate agent commission
- Recording fees
Veterans Hesitant to Buy Due to Price Concerns
The most common perceived hurdle mentioned by survey participants was rising housing prices (62%), followed by income worries (55%) and paying for upfront expenses (49%). Concerns about credit scores were mentioned by 32%, debt commitments by 35%, and ignorance of available benefits by 24%. Lack of knowledge regarding benefits was cited by nearly one in four veterans as a deterrent to purchasing.
When taking down payments and closing fees into account, only 21% of non-homeowners say they are fully or very likely to purchase a home in 2026. When those expenses are completely eliminated, 40% of veterans who are not homeowners say they would purchase a property. The largest upfront expense—the down payment—is already eliminated by the VA loan. Simply said, many individuals are unaware of that. Additional data reported that 45% of respondents said they do not have enough savings to cover closing costs, some 35% have less than $5,000 saved toward those costs, and 18% have nothing saved at all.
Overall, when asked how vital homeownership is boosting one’s net worth, roughly 37% of respondents said it is crucial, and 33% said it is crucial. The VA loan benefit is the most direct route to homeownership for those who have served, and it is evident that Veterans see a strong correlation between homeownership and financial security.
Further, the VA loan is not a final resort, according to NewDay USA analysts. However, it is a strategic financial strategy intended to reduce the cost of homeownership for those who have earned it, and it is based on the reality of military service.
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