After a few challenging years in the housing market, during which many military buyers paused due to high interest rates and tight inventories, VA Home Loans experienced a notable rebound in 2025.
In the first half of the year, overall VA Home Loan volume increased about 45% compared with the same period a year earlier. Purchase lending rose nearly 10%, and refinances surged almost 150% off a very low base as rates eased slightly. In fact, AAFMAA Mortgage Services LLC (AMS) funded more than 200 mortgages last year.
In 2026, we anticipate the market shifting again, with more Veterans entering the housing market, especially younger buyers using their VA benefits for the first time. For military families, this rebound represents new opportunities to purchase, refinance*, or build equity with one of the most potent home financing tools available, the VA Home Loan.
Related: How to Use the AMS Homebuying Guide
Younger Veterans are Driving the Surge
One of the most notable shifts in 2025 is the use of VA loan benefits. Gen Z Veterans, many of whom entered the military or left active duty during the pandemic, are emerging as one of the fastest-growing groups of VA homebuyers.
Recent analysis of VA Home Loan data indicates that Gen Z borrowers now account for approximately 12% of VA purchase loans, up from around 4% just three years ago. Their use of VA refinances is growing even faster, with some data showing a more than 450% year-over-year increase during the first half of FY 2025.
Several factors are driving this shift. Many Gen Z buyers, including some Veterans, delayed homeownership during the pandemic and the years that followed, as rising rents and inflation made buying feel out of reach. Now, with the VA Home Loan’s zero down payment option, more of them are finally able to leap into homeownership. They also place a high value on financial flexibility. Younger borrowers tend to be cautious about draining their savings, and the VA benefit allows them to keep more cash available for emergencies, family needs, or career transitions.
A digital-first mindset also plays a role. Gen Z expects streamlined, online experiences—and lenders like AMS have modernized VA applications and processing to meet those expectations. As this generation researches homebuying more deeply, they’re discovering the long-term benefits of their VA benefit—including lower upfront costs and the ability to avoid monthly mortgage insurance altogether.
Related: Current offers for AMS homebuyers
New VA Home Loan Features in 2025 Support Buyer Competitiveness
The VA Home Loan program already offers significant advantages, but several recent policy updates are making it even more practical.
One of the most important changes involves buyer broker fees. Historically, VA rules did not allow military homebuyers to use their loan to pay real estate agent commissions. To help VA buyers become more competitive, the VA issued temporary guidance in 2024 allowing them to pay reasonable and customary buyer broker fees in markets where sellers cannot or do not offer compensation. The rule, which took effect on August 10, 2024, ensures that military homebuyers can still compete for homes even as the industry adjusts to new norms.
Other VA updates in recent years include the modernization of appraisals, improvements to condominium approval processes, and the expansion of digital tools. Combined, these enhancements help streamline the path to homeownership.
Activity is Expected to Pick Up in 2026
Just as VA Home Loan activity rose in 2025, many experts believe the momentum will carry into 2026. For one thing, only 13% of eligible Veterans have ever used their VA Home Loan benefit, meaning the vast majority have not yet accessed it. This underutilization is widely attributed to a lack of awareness of the benefit’s value and how to use it.
Additional reporting notes that tens of thousands of potential VA Home Loans go unused each year, leaving billions of dollars in potential VA mortgage volume unclaimed. Analysts explicitly call for greater awareness so that Veterans can better compete with conventional buyers.
Affordability challenges aren’t going away either. Even if interest rates ease a bit, home prices and insurance costs remain high in many parts of the country. The VA Home Loan’s flexible underwriting gives qualified buyers some breathing room that conventional loans often can’t match.
There’s also a demographic shift underway. Gen Z and Millennial Veterans are forming households, starting families, and transitioning into civilian life, which naturally increases the desire for long-term housing stability and homeownership.
And through all these changes, the VA benefit continues to hold steady. Whether rates climb or fall, the VA guarantee helps keep pricing competitive, and consistent support from Ginnie Mae means lenders like AMS remain committed to serving VA borrowers in every market cycle.
Spring Military Homebuyers Should Prepare Now
If you are considering buying a home or refinancing in the next year, now is a strong time to explore your options. Here are a few steps to help you prepare:
- Get prequalified early. A lender like AMS can help you understand your VA eligibility, monthly payment expectations, and what price range is realistic.
- Understand new rules before you shop. Changes around buyer broker fees and competing in low-inventory markets may affect your budgeting and strategy.
- Keep your credit and savings stable. Although VA Home Loans do not require a down payment, maintaining financial stability can help you qualify more easily and secure better terms.
Consider your long-term plans. VA Home Loans offer refinancing flexibility, including the Interest Rate Reduction Refinance Loan (IRRRL), which enables eligible borrowers to refinance to a lower rate with minimal documentation when market conditions improve.
A Strong Outlook for Those Ready to Use Their Benefit
The VA Home Loan program has helped generations of service members build financial stability through homeownership. With the rebound underway in 2026 and younger Veterans entering the market in record numbers, the program is positioned to support even more military families.
For many buyers, the hardest part is simply getting started. AMS is here to help you understand your options, navigate the process, and make the most of a benefit you earned through your service.
Whether you are buying your first home, upgrading for your family, or refinancing to improve your financial footing, 2026 may be the right moment to act.
We’re Here to Help
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!
*Refinancing your mortgage may result in higher finance charges over the life of the loan.