An Estimated $41 Billion in VA Loan Volume Went Untapped in 2025

An estimated 83,100 VA loans worth roughly $41 billion in volume went untapped across U.S. metro areas in 2025, according to new analysis from Veterans United Home Loans, the nation’s largest VA purchase lender.

That estimated gap grew from $37.9 billion the year before.

In dozens of housing markets, the share of VA loans remains lower than the size of the local Veteran population would suggest. The difference appears in expensive coastal markets, large Northeastern cities, parts of the Midwest and other metros across the country.

The findings come at a time when affordability and saving for a down payment are standing in the way for many buyers. A recent Veterans United analysis found that a typical two-income household in the nation’s 50 largest metros needs about 6.5 years to save for a 20% down payment and closing costs.

Yet in dozens of markets, far fewer Veterans use this 0% down payment loan than the size of the local Veteran population would predict. Myths about VA loans may be part of the reason, causing some Veterans to potentially overlook it and some sellers and agents to view VA offers differently.

VA usage varies widely from one metro to another

Every metro has both a share of residents who are Veterans and a share of mortgages financed with VA loans.

When those figures are proportional, VA lending is keeping pace with the size of the local Veteran population. When VA loan share falls well below Veteran population share, the benefit is being used less frequently than expected.

Veterans United measures that relationship through our VA Loan Opportunity Index, which allows us to compare metro areas to a national benchmark.

The index also provides the basis for estimating the number of additional VA loans that might have been originated if a metro had performed at the national rate. That difference totaled approximately 83,100 untapped VA loans in 2025.

Underutilization reaches markets across the country

Each bubble on the map represents a metro with an estimated VA loan shortfall. Bubble size reflects the number of additional VA loans that would have been needed for that metro to match the national benchmark.

The largest concentrations appear in many of the nation's bigger housing markets, including significant clusters in the Northeast, along the coasts and throughout parts of the Midwest.

Military-heavy metros tend to show stronger VA usage, while some areas with substantial Veteran populations but less VA lending have much larger gaps.

Note: The map measures the estimated number of untapped loans, not the severity of underutilization by rate. That distinction matters because a large metro can generate a sizable loan shortfall from a comparatively small difference in market share.

The markets accounting for the biggest loan shortfalls

In the markets, each untapped loan represents a Veteran, service member or surviving spouse who could have used the VA loan benefit to buy or refinance a home.

New York-Newark-Jersey City had an estimated shortfall of 3,597 VA loans, the largest raw total in the analysis. Matching the national benchmark there would have meant about 3,600 more VA borrowers in 2025.

Philadelphia-Camden-Wilmington followed at 2,678, with Chicago-Naperville-Elgin at 2,410, Los Angeles-Long Beach-Anaheim at 2,305, Boston-Cambridge-Newton at 2,186 and Detroit-Warren-Dearborn at 2,150.

Other markets in the Top 25 include Pittsburgh, Minneapolis-St. Paul-Bloomington, San Francisco-Oakland-Fremont, Cleveland, Seattle-Tacoma-Bellevue, Denver-Aurora-Centennial, Portland-Vancouver-Hillsboro and several Florida metros.

The ranking shows where matching the national benchmark would translate into the largest number of additional VA loans and the most Veterans and service members using the benefit.

For eligible buyers, VA loans generally require no down payment, don’t require private mortgage insurance and typically carry lower interest rates than conventional loans. Those benefits can reduce both the savings needed to buy and the monthly mortgage payment, potentially putting homeownership within reach sooner.

The gap also raises a question about how VA financing is understood locally. If buyers or their agents view VA offers as less competitive, or sellers assume they involve more complications, eligible Veterans may face resistance to using a benefit that could make buying more affordable.

For Veterans considering a purchase, the practical step is to compare VA and conventional financing before deciding how much they need to save or whether they can afford to buy.

Where utilization is widening and narrowing

Napa, California’s gap between Veteran population and VA loan usage widened more than any other metro in the top 25, moving from the 17th-most underutilized metro in 2024 to the 4th-most in 2025.

Santa Cruz-Watsonville, California, moved from No. 4 to No. 14, while Waterloo-Cedar Falls, Iowa, dropped from No. 7 to No. 15 as VA usage moved closer to the size of their Veteran populations.

Binghamton, New York, fell from No. 10 to No. 16. Rochester, New York, and Pittsfield, Massachusetts, each climbed four places.

Dubuque, Iowa; Atlantic City-Hammonton, New Jersey; Cedar Rapids, Iowa; and Waterbury-Shelton, Connecticut, entered the top 25 for the first time.

San Jose remained the No. 1 underutilized metro for the second consecutive year, with Barnstable Town, Massachusetts, and Ithaca, New York, also remaining near the top.

New York-Newark-Jersey City moved out of the top 25 by rate after ranking No. 24 in 2024, even as its estimated raw shortfall grew to the largest in the country.

National VA growth came primarily from refinancing

VA loan underutilization continued even as the program gained mortgage market share nationally.

Based on Home Mortgage Disclosure Act (HMDA) data, VA loans represented 10.04% of the home purchase and refinance mortgage market in 2025, up from 9.80% in 2024 and 8.32% in 2023. That’s three consecutive years of growth.

Purchase lending changed little. VA’s share of home purchase originations was 9.22% in 2025, up slightly from 8.88% in 2024.

Instead, refinancing accounted for most of the growth. Refinances rose from 24% of all VA mortgage originations in 2023 to nearly 36% in 2025. Over the same period, VA's share of rate-and-term refinances climbed from 1.8% to roughly 15%.

That surge reflects increased use of Interest Rate Reduction Refinance Loans, or IRRRLs, which provide a streamlined refinance option for borrowers with an existing VA loan.

The increase helped push VA's overall mortgage share higher, but it represented activity among existing VA homeowners rather than growth among new VA homebuyers.

Methodology

This study analyzes VA loan utilization across U.S. metropolitan and micropolitan statistical areas using data from the American Community Survey conducted by the U.S. Census Bureau and the Home Mortgage Disclosure Act loan-level dataset.

Official 2025 Veteran population estimates by metro area were not yet available, so Veterans United generated projections using two methods.

The first applied each metro's most recent Veteran share of the population to its estimated 2025 total population. The second projected Veteran population using the metro's six-year population trend. The two results were averaged to create the final 2025 estimate.

Census and HMDA data were matched using standardized federal metro area codes. Metropolitan divisions belonging to the same larger metro were combined where necessary.

VA loan utilization was calculated as VA originations divided by all qualifying home purchase and refinance originations in each metro. Markets with fewer than 100 total originations in 2025 were excluded to limit volatility from small sample sizes.

The VA Loan Opportunity Index compares a metro's Veteran population share with its VA loan utilization rate.

Markets where VA loan share was meaningfully below Veteran population share were categorized as underutilized. Markets where the figures were relatively similar were considered balanced, while markets where VA share exceeded Veteran population share were classified as well-served.

Those categories were determined using the mean across metros and each market's position relative to the standard deviation.

A national benchmark was then used to estimate potential additional VA loans. The national VA Loan Opportunity Index was 0.4410 in 2025.

Each metro's Veteran population share was divided by that benchmark to produce an expected VA loan share. That share was multiplied by the metro's total qualifying mortgage originations, then actual VA originations were subtracted.

The resulting figure represents the estimated number of additional VA loans that could have been originated if the metro had matched the national benchmark.

Note on the 2024 methodology

Since the 2024 version of this study was published, we refined how we estimate each metro’s Veteran population. The updated approach measures Veterans as a share of the total population, rather than the adult population alone. This provides a more complete comparison across markets with very different demographics, from retiree-heavy coastal metros to communities with large populations of young military families.

Under this refined methodology, last year's opportunity was larger than originally reported, meaning the original figures were conservative estimates. This latest version of the VA Loan Underutilization Study includes updated estimates and a new look at how VA loan usage has changed since the original publication.