Despite the Department of Veterans Affairs’ (VA) home loan being available to millions of eligible veterans, the program continues to be misconstrued and underutilized. According to an analysis released last October from Veterans United Home Loans, there is $28 billion in untapped funds available through the loan. Each year, more than 58,000 loans are not used across the U.S. But Eric Bernstein, president and co-founder of LendFriend Mortgage, believes that with the current housing climate, affected by higher interest rates and rising mortgage costs, now could be the ideal time for veterans to consider a VA home loan. Bernstein, with more than 12 years of experience in financial services and wealth management, has helped many veterans secure loans and find ways to use the program to help lower monthly payments. Still, some housing markets pose challenges, even with VA-backed loans. Those loans have made up about 10-12% of the mortgage market in the past few years, and have recently fallen to nearly 8%, factors driven mainly by lack of affordability. Bernstein said one of the main reasons VA loan applications have declined is that it’s harder for first-time buyers and middle-income borrowers – including veterans – to afford a house, a trend he feels was partly brought on by the pandemic housing market and subsequent bidding wars. “During the peak of the market, sellers heavily favored buyers willing to waive appraisal protections, shorten timelines aggressively, and remove as many contingencies as possible. VA buyers generally could not compete in the same way because VA loans are built to make sure the buyer is protected, which is why the appraisal is mandatory, and the veteran has the option to terminate if the property misses the appraisal,” Bernstein told Military.com. “As a result, many veterans felt pressure to move toward conventional loans simply to make their offers appear more competitive, even when the VA loan was the stronger financial product for them. The irony is that VA loans have become even more valuable in expensive housing markets because they allow borrowers to preserve liquidity with 0% down financing while still getting lower interest rates and no mortgage insurance. In a market where affordability is strained, a VA loan is a huge benefit. The truth of the matter is that if everyone had access to 0% down financing with lower rates and no PMI (purchasing manager’s index), most people would use it.”