Dive Brief:
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A greater percentage of U.S. veterans are homeowners than the general population, according to a report by real estate website Trulia based on the Census Bureau’s 2013 American Community Survey.
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One reason why 79% of households headed by vets are owned—compared with 63% of households whose heads have never served in the military—is that older people are more likely to own property, and the median age of veterans is 64. The median age of the general population is 45, noted the report, which was released Monday.
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Another reason is the availability of Veterans Administration home loans, which don’t require borrowers to make down payments or pay for mortgage insurance as long as the mortgage amount is less than $417,000 in most areas. About 10% of veterans have VA-backed home loans.
Dive Insight:
As home prices have risen, the VA has raised the sales price limit for its no-down payment loans in about 230 expensive markets. In 70 of those markets, the limit exceeds $625,500. But that congressionally approved extension is scheduled to expire in December. Once it does, vets buying homes in counties with home prices above the limit set by the federal government for the easy-to-acquire loans could have to make down payments. The payment would equal 25% of the difference between the limit and the home’s purchase price.
It’s likely that the maximum qualifying selling price of a home in a high-cost county would top out at $625,500. If it does, VA loan volume—and thus, home purchases—could plummet among the small percentage of vets who would otherwise buy in upscale communities. The average no-down payment VA loan in 2014 was $237,000, according to the VA.
