The VA home loan program made a strong comeback in Fiscal Year 2025, reversing the slowdown seen the year before and highlighting the program’s continued importance for military homebuyers.
A new analysis from Veterans United Home Loans, the nation’s largest VA lender, shows that VA loan activity rose sharply as more veterans and service members returned to the market despite ongoing affordability challenges.
VA Lending Jumps Nearly 27%
According to the report, total VA loan volume increased 26.8% year over year, rising to 528,343 loans in Fiscal 2025 from 416,363 loans in Fiscal 2024.
Veterans United said the rebound was driven by two key factors:
- A steadier home purchase market
- A strong rise in refinancing activity
Together, these trends suggest growing confidence among military borrowers navigating higher home prices and mortgage rates.
Gen Z Leads the VA Loan Revival
Younger veterans played a major role in the program’s resurgence. Generation Z, now the largest group of military homebuyers, accounted for 38% of all VA loan activity in Fiscal 2025.
Gen Z was also the only generation to post year-over-year purchase growth during Fiscal 2024, and that momentum accelerated in 2025. No other age group came close to matching their pace.
“Gen Z is expanding its presence faster than any other VA buyer group,” said Chris Birk, Vice President of Mortgage Insight at Veterans United.
“They’re entering the market at a difficult time, and the VA loan benefit is helping them compete when affordability is tight.”
VA Purchase Loans Rebound
VA-backed home purchase loans rose 8.5% year over year, reaching 323,835 loans, up from 298,327 the prior year.
This marked a clear turnaround after Fiscal 2024, when VA purchase volume dropped more than 5% compared to Fiscal 2023.
Veterans United said the VA loan’s key benefits especially zero down payment and more flexible credit standards continue to be critical for first-time buyers and younger households.
VA Purchase Loans by Generation
| Generation | FY25 Loans | FY24 Loans | Change |
|---|---|---|---|
| Gen Z | 47,802 | 34,616 | +38% |
| Millennials | 152,513 | 144,678 | +5.4% |
| Gen X | 72,102 | 70,768 | +1.9% |
| Baby Boomers | 46,285 | 43,272 | +7.0% |
| Silent & Greatest | 5,133 | 4,993 | +2.8% |
The data shows Gen Z veterans far outpacing older generations in growth, even though millennials still account for the largest number of VA purchase loans overall.
Refinancing Activity Surges Again
While VA lending remains below pandemic-era highs, refinancing made a strong return in Fiscal 2025.
- Total VA refinances jumped 73.2% year over year
- Cash-out refinances made up 26.5% of refi activity
Borrowers used refinances to lower monthly payments, adjust loan terms, or access home equity built during recent years of price growth.
Where Gen Z Veterans Are Buying
Veterans United found that Gen Z VA buyers are moving into a mix of large metro areas and traditional military regions.
The fastest-growing destinations included:
- Texas
- The Carolinas
- California
These markets saw growth well above the national average for Gen Z buyers, suggesting younger veterans are choosing areas with strong job markets, military ties, and long-term opportunity.
What This Means for the VA Loan Program
The rebound in VA lending shows the program remains a powerful tool, especially for younger veterans facing affordability pressure. As Gen Z continues to age into peak homebuying years, their influence on the VA loan market is expected to grow even further.
With purchase activity recovering and refinances picking up, the VA loan program appears positioned for continued relevance in the years ahead. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
