VA Loans Are Helping Veterans Buy Their First Homes With 0% Down Advantage

The government shutdown has not put a pause on Department of Veterans Affairs loans. That's good news for our military servicemen and women who are looking to become first-time homeowners.

New research from Realtor.com® and the National Association of Realtors® reveals certain markets are benefiting from the loan's 0% down payment, while other metros are failing to take advantage of VA loans.

A VA loan is a mortgage option backed by the VA. It's available to veterans, current service members, and their spouses. The VA guarantees a portion of the loan, and it's also financed by private lenders—mortgage companies and banks.

"A veteran can put zero down on a new mortgage and without any mortgage insurance. You do have to qualify with credit and debt-to-income, but literally have no money down," Jeremy Schachter, branch manager at Fairway Home Mortgage, explains to Realtor.com. "This, by far, is the best mortgage out there and for good reason. A veteran who serves our country should be able to obtain the American dream."

Like other loans, VA loans offer competitive interest rates for buying a home, condominium, multifamily home, new construction, or a manufactured home.

But what separates this loan from others is the $0 down payment—the biggest benefit of a VA loan.

The NAR 2024 Profile of Home Buyers and Sellers found that 74% of first-time homebuyers using VA loans made a 0% down payment.

“The VA home loan is one of the most successful mortgage programs in American history, opening the door to homeownership for millions of veterans and service members who might otherwise be priced out," Shannon McGahn, NAR executive vice president and chief advocacy officer, tells Realtor.com. "By eliminating the down payment requirement and limiting certain closing costs, VA loans make it possible for qualified buyers to purchase a home without needing large upfront savings."

The median down payment percentage for a first-time homebuyer with a conventional loan was 12%, according to the analysis.

"VA loans allow eligible buyers to purchase homes with 0% down, making homeownership more accessible and achievable sooner," explains Hannah Jones, senior economic research analyst at Realtor.com.

Path to homeownership

For first-time homebuyers, the biggest financial benefit of a VA loan compared to a conventional loan is not having to fork over a down payment. This gives first-time buyers approved for a VA loan a jump-start toward homeownership.

The report identified metros where a VA loan has helped buyers reach homeownership faster: 2.7 years sooner than a conventional loan for eligible veterans in Akron, OH, and 2.8 years sooner in Dayton, OH.

In higher-priced metros, it ranges from 6.5 years sooner in New York City; 7.5 years sooner in both San Diego and Oxnard–Thousand Oaks, CA; and up to 10 years sooner in Los Angeles.

"With VA loans, homebuyers can own property without having to pay anything down, which is ideal for those who will be purchasing property in California," Sain Rhodes, real estate expert at Clever Offers, tells Realtor.com. "Instead of having to pay $10,500 to $70,000, the veteran can pay it toward other necessary expenses such as real estate fees or relocation, if need be."

The report explains that for a typical $430,000 home—a first-time VA borrower can buy with 0% down, needing only to cover standard closing costs.

Meanwhile, a conventional first-time buyer with a 12% down payment must bring $51,600 in cash before even counting those same closing costs. By removing the down payment hurdle, the VA loan makes homeownership more accessible and financially achievable for first-time buyers.

"In today’s market, that benefit is especially powerful in high-cost areas where affordability is a growing barrier," explains McGahn. "The VA program makes it possible for those who’ve served our nation to purchase homes in tight markets and start to build generational wealth. It’s a shining example of a government-backed program that delivers real results, changing lives for the families it serves."

For many working families, trying to save $51,600 in cash for a down payment can seem daunting. If a first-time homebuyer sets aside 15% of their annual gross household income, it would take about 4.4 years for a household with a typical gross income of $78,700 to save enough for a conventional down payment, according to the report.

"I’ve spoken to several veterans that thought this benefit expired or they needed to use it in a specified time frame, so certainly more education is needed," explains Michael Pearson, senior vice president of business development at A&D Mortgage. "They are fantastic loans and a great tool for veteran first-time homebuyers to use to purchase that first home."