VA Loans Have Record-Setting 2013
The Department of Veterans Affairs backed 630,000 mortgages in fiscal year 2013, an all-time high for the benefit program. That record volume punctuates an incredible recent run for VA loans, which have experienced tremendous growth in the wake of the financial collapse.
VA loan volume has soared 372 percent since fiscal year 2007, driven in large part by historically low interest rates and a more restrictive lending environment that made conventional and even FHA financing tough to secure.
In addition to the record volume, the VA made history in 2013 by guaranteeing its 20 millionth mortgage, which went to the surviving spouse of an Iraq War veteran.
VA lending boom
Here’s a snapshot of national VA loan volume over the past seven years:
Fiscal year 2013: 629,312 Fiscal year 2012: 539,884 Fiscal year 2011: 357,592 Fiscal year 2010: 314,011 Fiscal year 2009: 325,690 Fiscal year 2008: 179,670 Fiscal year 2007: 133,313
The need for higher credit scores and bigger down payments has reinvigorated this home loan program. VA loans have no required down payment and feature more flexible and forgiving requirements.
Despite that flexibility, they’ve had the lowest foreclosure rate of any mortgage on the market for nearly all of the past five years, according to statistics from the Mortgage Bankers Association.
Most VA lenders are looking for a credit score of at least 620. Even that can be a difficult benchmark for some veterans, but it’s considerably lower than typical requirements for both FHA and conventional financing. In November 2013, the average credit score on a successful conventional loan was 756, according to Ellie Mae; for FHA loans, it was 690.
Conventional and FHA loans also require a minimum down payment, typically 5 percent and 3.5 percent, respectively. About 9 in 10 VA borrowers purchase a home without putting down a single dollar.