Saturday marks the 80th anniversary of the GI Bill, which created the Department of Veterans Affairs’ Home Loan Guaranty Program and has helped more than 28 million service members and their families become homeowners over the decades. The National Association of REALTORS® has long advocated for the expansion of the VA home loan program and most recently lobbied the department to drop its ban on buyer broker fees (which the VA has temporarily done).
The VA loan program has contributed $3.9 trillion to the U.S. economy, according to a new analysis by Veterans United Home Loans, a VA lender. About 11% of new mortgages are VA loans, and that number has been on the rise since the Great Recession, the study finds. Nearly 60% of VA purchase loans in fiscal year 2023 went to millennial and Generation Z buyers.
“The survey findings and economic analysis underscore the profound impact of the VA loan program on veterans and service members, particularly younger generations,” says Chris Birk, vice president of mortgage insight at Veterans United Home Loans. Eight in 10 veterans were 34 years old or younger the first time they used their benefit, according to the survey. Ninety percent of veterans and service members say the biggest benefit of the VA home loan is that it makes purchasing a property more affordable.
“This historic benefit has helped millions of veterans and military families build wealth and shape the growth of the American middle class,” Birk says. “VA loans also are helping to close the homeownership gap for women and minorities. Today, this hard-earned benefit is more important than it’s ever been.”
Restoring and Safeguarding the Benefits
The Servicemen’s Readjustment Act of 1944, known as the GI Bill of Rights, was signed into law by President Franklin D. Roosevelt and provides education, training, rehabilitation, job placement and 0% down home loans to military service members. While the GI Bill has been credited for propelling many military families into the middle class, it also has been criticized for shutting some groups out.
About 1 million Black World War II veterans were unable to access the benefits because of discrimination after returning home. Two bills currently in Congress seek to change that by extending the benefits to the surviving family members of Black World War II vets who did not have access to their original VA home loan benefit—a move that NAR supports. “The quickest ways to overcome poverty in this country are through education and homeownership,” Rep. Jim Clyburn, D-S.C., noted in 2023 as a co-sponsor of The GI Restoration Act. “The denial of these benefits to Black veterans returning home from service has impacted the accumulation of generational wealth for Black families across the country.”
NAR also wants to ensure that all service members can access the guidance of a real estate professional during the homebuying process. The VA announced this week that it’s lifting its ban on buyer broker fees, which would have prevented VA buyers from being charged a “brokerage fee or commission in connection with the services” of a real estate professional. That policy could have created complications for VA buyers under new practice changes required by NAR’s proposed settlement agreement.
“REALTORS®, many of whom specialize in working with VA buyers, serve as advocates for home buyers through the entire purchasing process,” NAR wrote in a letter to the VA in March, explaining the crucial role real estate professionals play. “From the initial home search, inspections, negotiations and closings, REALTORS® work closely with their veteran clients to ensure their offers are seen and considered in a competitive market. When representing veterans, REALTORS® explicitly ensure they can utilize the benefits promised to them for their service and sacrifice for our country.”
Debunking the Myths
In 2022, NAR created a video series in partnership with the VA to help real estate professionals understand how their veteran clients can access and use VA loans. Part one and part two of the series both aim to dispel misconceptions about VA home loans, as well as guide agents and home buyers through the process.
Many misperceptions exist: For example, more than a third of service members and veterans say they believe VA loans take longer to close than other loan types. Many also believe VA home loans can only be used once or cost more than other loan products, according to the Veterans United Home Loans survey.
In reality, closing timelines for VA loans are similar to other mortgages, and VA loans typically have the lowest average interest rates in the market. They also tend to be less expensive than other loans in both upfront costs and monthly payments. Military members can use the VA home loan benefit more than once and throughout their lives.
