For more than 80 years, the VA Home Loan program has been one of the most powerful benefits available to military families. It has helped millions of servicemembers, Veterans, and surviving spouses buy or refinance homes with favorable terms that can be difficult to find elsewhere. In most cases, there’s no down payment and no private mortgage insurance, plus interest rates are normally very competitive. However, like the housing market itself, VA Home Loans do not stand still.

As of mid-2025, several developments have reshaped how military families and lenders navigate the VA Home Loan space. From rising housing allowances and new loan limits, to the ripple effects of litigation in the real estate industry, Veterans today face a landscape that looks different from just a few years ago. 

Understanding these changes is critical for anyone considering a move, whether it is a first home purchase, a refinance, or even the increasingly popular option of assuming a VA Home Loan.

Related: How Credit Score Changes Could Affect Military Homebuyers

Rising BAH Rates Make Off-Base Housing More Attractive

One of the most immediate changes for military families this year is the Basic Allowance for Housing (BAH) increase. For 2025, BAH rates rose by an average of 5.4% nationwide. This increase gives servicemembers additional monthly income to cover housing costs, whether renting off-base or purchasing a home with a VA Home Loan.

The impact of higher BAH is significant because it strengthens the buying power of active-duty families at a time when affordability is a challenge for many Americans. Elevated mortgage rates and stubbornly high home prices have sidelined some buyers. But for military households, the boost in BAH may tip the scales back toward ownership, particularly when paired with the no-down-payment feature of VA financing.

In many markets, BAH can now cover a larger portion of the monthly mortgage payment, property taxes, and homeowners insurance. That means families who may have hesitated to buy last year could now take a second look. For others, a higher BAH may make moving into desirable rental properties near base easier, improving quality of life and reducing commute times.

Related: How to Avoid Mortgage Scams

New Loan Limits Expand Options For 2025

Another major change shaping the VA Home Loan market is the increase in loan limits across most of the country. While Veterans with full entitlement are not subject to loan limits in the traditional sense, the published county-level limits still matter. They establish guidelines for lenders and affect cases where partial entitlement is used.

For 2025, the Federal Housing Finance Agency raised conforming loan limits, and VA Home Loan limits rose accordingly. This means Veterans and servicemembers can access higher financing without needing a down payment in many high-cost markets. For families stationed in expensive housing areas—such as California, Colorado, Virginia or the Washington, D.C. metro—the change expands opportunities to purchase homes that might otherwise be out of reach.

Higher loan limits also matter for refinancing. Veterans who want to use their VA benefit to refinance into a lower rate, pull cash out of their equity or consolidate debt can now do so at higher balances. This flexibility is especially valuable as home values continue to climb in many markets, even as overall affordability remains stretched.

Impact Of The NAR Commission Lawsuit

The real estate industry is still absorbing the effects of the National Association of Realtors commission lawsuit, which has challenged long-standing practices regarding buyer’s agents' compensation. The outcome of these changes is particularly important for VA borrowers.

Historically, VA rules have prohibited Veterans from paying real estate agent commissions directly. Instead, sellers typically covered those costs or built them into the transaction in other ways. As the industry shifts in response to the lawsuit, questions remain about how VA buyers will work with agents and how compensation will be handled in a compliant way.

In practice, this means Veterans may face more upfront conversations about representation and costs. Lenders, real estate professionals, and the Department of Veterans Affairs (VA) monitor developments closely. For now, transparency and education will be essential. Military families deserve to know how potential commission changes could affect their homebuying process, and lenders will need to help guide those discussions.

Related: Assumable Mortgages are HOT These Days, Here’s Why

The Growing Popularity of VA Home Loan Assumptions

One of the most notable trends in today’s VA Home Loan landscape is the rise of loan assumptions. With mortgage rates still elevated compared to the historic lows of just a few years ago, buyers are increasingly interested in securing affordable financing.

A VA Home Loan assumption allows a qualified buyer—whether a Veteran or a civilian—to take over a seller's existing loan. The buyer steps into the same interest rate, remaining loan balance and terms. For example, a seller who purchased a home in 2021 with a VA Home Loan at 2.75% could pass that rate to a buyer today, even though prevailing market rates may be closer to 6.5%.

This can create substantial monthly savings for buyers and make homes financed with VA Home Loans more attractive on the market. Sellers also benefit because assumable loans can draw more interest and potentially higher offers. Not all loans are assumable and the process requires lender and VA approval, but the appeal is clear. In fact, some lenders report a steady uptick in assumption requests as rate-conscious buyers search for creative solutions.

Veterans should be aware, however, that if their loan is assumed by a non-Veteran, their entitlement may remain tied up until the loan is paid off. Careful consideration and guidance from knowledgeable lenders is essential. Still, as long as interest rates remain high, VA Home Loan assumptions are likely to remain a hot topic.

Market Conditions Keep Evolving

Beyond these headline trends, the VA Home Loan landscape continues to evolve in response to broader market forces. Interest rates, inflation and housing supply all influence how Veterans use their benefits. In some regions, limited inventory keeps competition intense, even as affordability pressures grow. In others, new construction is expanding options, creating opportunities for VA financing in both single-family homes and condominiums.

Technology also plays a growing role. From digital appraisals and remote notarization to faster underwriting systems, lenders are investing in ways to make the VA Home Loan process smoother and more efficient. Military families who relocate frequently especially value speed and transparency, and the industry is working to deliver.

Looking Ahead

The VA Home Loan program remains one of the strongest tools available to America’s military community. It adapts with the times, adjusting to housing costs, regulatory changes and borrower needs. In 2025, those adaptations include more buying power through higher allowances and limits, new considerations around agent commissions and creative strategies like loan assumptions.

For servicemembers and Veterans, the key is to stay proactive. Explore what these updates mean for your unique situation, ask questions and lean on lenders who understand the nuances of VA financing. The housing market may shift, but the core benefit of the VA Home Loan endures: opening doors to homeownership for those who have served.

We’re Here to Help

Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AMS Military Mortgage Advisor, a licensed mortgage loan originator, will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.

Ensuring Armed Forces Mutual Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-422-3622!