By Eric Bernstein, President and Co-founder of LendFriend Mortgage
There’s a financing tool available to millions of American veterans that requires no down payment, carries no private mortgage insurance, and typically offers interest rates that beat conventional options. It’s backed by the federal government, has been around since 1944, and by nearly any objective measure is one of the most borrower-friendly mortgage options ever created.
And yet VA loans account for just 8% of mortgage originations nationwide, in a country where an estimated 18 million veterans are potentially eligible.
Honestly, that figure should give the mortgage industry pause. We have a product that routinely outperforms conventional alternatives, and we’re barely putting it in front of the people who earned the right to use it. The product isn’t the problem. The friction around it is.
The Numbers Tell a Story Worth Examining
Market share for VA loans has actually been higher. Just a few years ago, VA-backed loans made up about 10 to 12% of the mortgage market. That’s since fallen down to around 8%, and the timing tracks with something most people in real estate already know: the rate and affordability environment of the past few years has been brutal for buyers across the board.
That explains part of the decline. But not all of it. VA loans don’t need a down payment. No PMI. Rates typically run below conventional alternatives. In a high-rate market, those are pretty big advantages. Yet utilization dropped anyway. My read is that the barrier was never really about the product but the friction that builds up around it long before a veteran ever sits down with a lender.
Which brings us to the number that tells the real story: an estimated 58,000 VA loans go untapped every single year, representing nearly $28 billion in unused borrowing power. That number doesn’t move with interest rates. It was there when the market was hot, and it’s here now, which means we’re not looking at a cyclical dip. We’re looking at a structural problem that will not fix itself.
The Seller Resistance Problem Is Built on Old Information
Ask a listing agent why they are uncomfortable with a VA offer, and you will get some version of the same answer: the appraisal. Too strict. Too slow. Too much risk of losing the deal.
That reputation has roots. VA appraisals in earlier decades came with more conditions, longer timelines, and a higher likelihood of complications than most agents wanted to deal with. That experience shaped perceptions across an entire generation of real estate professionals, and perceptions have a way of outlasting the conditions that created them.
Consider a scenario that plays out more than it should. A veteran buyer, fully qualified, puts in a competitive offer. The listing agent, working from assumptions formed years ago, nudges their client toward a slightly weaker conventional offer. The veteran loses the house, and it has nothing to do with the strength of their bid. It comes down to one person in the chain making a call based on how VA transactions used to work.
The frustrating part is that those concerns are largely outdated. VA appraisals today move faster, carry fewer conditions, and create far less friction than the version most agents have stored in their memory. That hasn’t filtered through to everyone making decisions at the table, though. Sellers, listing agents, and their attorneys all have a say in how an offer lands. Until the current reality of VA lending reaches all of them, qualified buyers will keep losing ground they shouldn’t be losing.
Closing the Gap Starts with Process and Education
Diagnosis is the easy part. Here’s what actually moves the needle.
For lenders, begin with having the VA conversation earlier. Does this person have military service in their background? This question costs nothing and takes seconds. Certificate of Eligibility checks take minutes. Many veterans who qualify have never been told they qualify. Others have a general awareness of the benefit but no real grasp of what it covers or how to access it. Getting this conversation on the table at the outset, before other financing paths have been explored, is probably the easiest thing that anyone in this industry could do differently tomorrow.
On the seller side, the reluctance to accept VA offers is almost always a matter of unfamiliarity. Many listing agents simply haven’t seen enough well-run VA transactions to revise what they think they know. A lender who calls when a VA offer goes in, walks through the current process, and makes themselves available to answer questions is doing something that most lenders don’t bother to do. That call changes how the offer is received. It’s probably the most underused tool in closing the perception gap.
For buyer’s agents, the change is easier than it appears: get out in front of how VA appraisal protections are presented. These protections exist for the buyer’s benefit. Presenting them that way, specifically and confidently, rather than letting them sit as an unexplained variable, changes how VA offers are received before negotiations even begin. Agents who can point to how VA sales actually work in the current market are the ones who will have those offers taken seriously.
Each and every one of these is a change in behavior, not in structure. Which means the people reading this are already equipped to make them.
The Cost of Leaving a Benefit on the Table
28 billion dollars in untapped borrowing capacity, every year. At some point, it ceases to be a number and becomes a sign that something needs to be addressed.
The VA loan program is not broken. The benefit is real, the qualifications are wide open, and for buyers trying to navigate a market that hasn’t made things easy, the product holds up well compared to anything else out there. What isn’t working is the space between the benefit and the borrower: the missed conversations, the outdated perceptions, and the friction that builds until a veteran buys a home with a product that wasn’t their best option, or doesn’t buy at all.
The professionals closest to these transactions are also the ones best positioned to alter this state of affairs. Not through some broad industry initiative, but through the kind of informed engagement that good practitioners already bring to every other aspect of their work. The opportunity is there. For the veterans sitting on the other side of these transactions, so too is the need.
Written by Eric Bernstein for www.RealtyTimes.com Copyright © 2026 Realty Times All Rights Reserved. As the President and Co-Founder of LendFriend Mortgage, Eric Bernstein has over 12 years of experience in financial services and wealth management, with a focus on mortgage lending and residential mortgages.
