VA home loan program added $4 trillion to US economy since WWII

The Veterans Affairs Home Loans program has added nearly $4 trillion to the U.S. economy over its 80-year history, according to an independent analysis released in conjunction with the milestone anniversary.

The findings, from University of Missouri economics professor Joseph Haslag, point to a dramatic return on taxpayer investment in veterans homes since the end of World War II, when the home loan program began. The study was backed by Veterans United Home Loans, a Missouri-based lender, to mark the June 22 start date of the program.

“This historic benefit has helped millions of veterans and military families build wealth and shaped the growth of the American middle class,” Chris Birk, vice president of mortgage insight at Veterans United, said in a statement. “Today, this hard-earned benefit is more important than it has ever been.”

The home loan program is one of the most popular and best known benefits for American veterans. Individuals who qualify can receive lower interest rates, smaller closing costs and often do not need to make any down payments to finalize the loans.

VA home loan volume reached a record high in 2021, at more than $447 billion, according to department statistics. The department is currently backing more than 3.7 million active home loans, including more than 400,000 new loans in 2023 alone. Officials are expected to issue their 30 millionth home loan later this year.

Haslag found that over the last eight decades, the total value of loans purchased through the program has reached about $3.2 trillion.

But those costs are largely held by veterans themselves. The loan program serves as a guarantee against default for lenders, meaning the costs to taxpayers only occur when individuals fail to make payments on their mortgages. Without that backing, many of those home purchases (and related local economic benefits) would not have occurred.

As a result, Haslag wrote in his analysis, the program “has been a huge success” for the country in terms of positive economic impact.

Veterans United officials, who financed more than $17 billion in VA home loans last year, said that despite the program’s popularity, company surveys of veterans showed that about one-in-five veterans believe the benefit can only be used once, among other misconceptions.

Lawmakers in recent years have eyed possible changes to the program to speed up appraisal times and cut down on regulations surrounding the department home loan process, but largely left the benefit unchanged.

More information on the benefit is available through the department’s website.