VA mortgage applications accounted for 13.4% of all mortgage applications in the week ending Oct. 24, according to the Mortgage Bankers Association, with the Federal Housing Administration at 20.5% and the remainder largely conventional loans.

The following week, VA's share rose to 14.9%, while FHA fell to 18.5%. During August, 7.3% of mortgaged homebuyers used a VA loan, up from 6.5% in August 2024, marking the highest August share since 2019, Redfin reported. At the same time, conventional mortgages accounted for 78.9% of originations, while FHA loans were used by 13.9% of borrowers.

"VA loans have a better chance of getting accepted in today's buyer's market than they did several years ago, when buyers were competing against each other and sellers were calling the shots," said Bill Banfield, chief business officer at Rocket, Redfin's parent company.

Jim Fletcher, a Tampa-based Redfin agent, noted that buyers using VA loans with low or no down payment are winning deals in slow markets with ample inventory. However, some sellers still favor conventional loans with higher down payments, said Matt Ferris, a Redfin agent in Virginia, who described military family sellers choosing higher conventional offers over VA bids.

VA lending continues despite shutdown strains

Even amid the ongoing government shutdown, VA lending is largely proceeding, Pete Kasperowicz, press secretary for the U.S. Department of Veterans Affairs, said in an email. "Guaranteed loans are processed by the mortgage industry, and VA processes home loan eligibility determinations. Nearly 80% of all requests for certificates of eligibility are processed instantaneously, and 99.9% in five days."

The VA is experiencing some strain, with nearly 37,000 employees furloughed or working without pay. Kasperowicz said the shutdown has affected other VA services, leaving hundreds of thousands of veterans without counseling, transition briefings, or educational support.

NewDay USA, a lender focused on veterans, has not seen disruptions in processing VA loans, said Neil Brooks, newly appointed president of NewDay Home. The process becomes more complicated when a veteran works for the federal government.

"If you're trying to close on a house, and you did four years in the Air Force and now work for the TSA, or as an air traffic controller, and you haven't been paid in 30 days, you're not closing on that house," Brooks said.

Employment verification, the final step in underwriting, can stall or collapse a transaction if the borrower has no current income or no one is available to verify it due to furloughs.

Brooks, a Navy veteran and former top-producing Realtor, is now launching NewDay Home and a network of real estate agents, with plans to recruit other veterans.

Barriers to broader VA loan use

Many veterans still have misconceptions about the VA program, a Navy Federal Credit Union survey found. More than half incorrectly believed a down payment was required. Only 47% of veterans knew the no-down-payment option exists, compared with 29% of active duty participants. Survey respondents averaged more than two misconceptions about the program.

The survey found that under 40% relied on official VA or military resources for information, while 20% conducted personal research and 9% consulted family members.

"When our members feel understood and supported, the dream of homeownership becomes a reality — and that's a mission we're proud to stand behind," said Christopher Davis, Navy Federal's assistant vice president, residential lending.

NewDay Home and other initiatives support veterans

Brooks emphasized that NewDay Home provides expert guidance to veterans navigating the homebuying process. Even sellers can benefit when appraisals come in below contract price through the "Tidewater" process, which allows agents to provide additional market information to support the sale price.

Although VA loans are typically 100% loan-to-value, many veterans lack funds for closing costs. Through NewDay Advantage, the company offers an unsecured loan with a five-year term at 9.99% interest, returning all interest paid if repaid in the first year.

"We are doing what we can to give a leg up to our veteran and active duty community right now; this is unprecedented in the industry," Brooks said.

Other efforts include the Federal Home Loan Bank of Dallas' HAVEN program. Army veteran Derek Gonzalez received a $22,000 grant from the Housing Assistance for Veterans program for home repairs in Killeen, Texas. The program, funded with $1 million this year and offering up to $25,000 per individual, can be used for home modifications, housing construction, and down payment assistance.

The Mortgage Industry Standards Organization recently completed a 30-day comment period on a Federal Government Housing Agency Servicing Dataset, part of VA Loan Guaranty Service modernization efforts.

"This effort supports the VA's future modernization goals and lays the groundwork for broader industry adoption of standard servicing data, which will strengthen consistency and efficiency in loan servicing," said Rick Hill, acting president of MISMO.

Looking ahead

As Veterans Day approaches, these programs and initiatives highlight the ongoing evolution of VA home loans, aiming to clarify misconceptions and support veterans in achieving homeownership even amid external challenges such as government shutdowns.