CFPB: VA Share of First-Time Home Buying Servicemembers Up Sharply

MBA NewsLink Staff

March 14, 2019


The Consumer Financial Protection Bureau released a report focusing on mortgages made to first-time homebuyers who are serving in the armed forces or are veterans, showing the share of servicemembers using VA mortgages nearly tripled in the years following the housing crisis.

The study found the share of first-time home buying servicemembers using VA mortgages increased from 30 percent before 2007 to 63 percent in 2009. Among non-servicemember first-time homebuyers there was a parallel increase in the use of FHA and USDA mortgages. However, whereas non-servicemembers' reliance on FHA/USDA mortgages declined after 2009, servicemembers' reliance on VA loans continued to increase. In 2016, 78 percent of servicemember loans were VA loans.

The report said the greater share of VA loans among servicemembers was part of a larger shift among consumers (both servicemembers and non-servicemembers) away from conventional to government-guaranteed mortgages between 2006 and 2009. Conventional mortgages held at nearly 60 percent of loans among first-time home buying servicemembers in 2006 and 2007, but this share declined to 13 percent by 2016. By comparison, the conventional loan share among non-servicemembers fell from nearly 90 percent before 2008 to 41 percent in 2009, then increased back to 60 percent in 2016. The combined share of FHA and USDA mortgages to these borrowers increased and then decreased accordingly.

The Bureau reported the median loan amount for first-time home buying servicemembers with a VA loan increased in nominal dollars from $156,000 in 2006 to $212,000 in 2016, closely tracking the median value of conventional home loans taken out by non-servicemembers. By contrast, the median loan amounts in nominal dollars for servicemembers who used conventional or FHA/USDA mortgages during this period were lower in value compared to VA loans and increased at a slower pace, growing from $130,000 in 2006 to $150,000 in 2016.

The Quarterly Consumer Credit Trends report, Mortgages to First-time Homebuying Servicemembers, is accessible at https://content.consumerfinance.gov/data-research/research-reports/quarterly-consumer-credit-trends-mortgages-first-time-homebuying-servicemembers/.

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