The U.S. Department of Veterans Affairs released the Home Loan Guaranty 2016 Fiscal Year report. The report shows that there were 705,474 VA loans guaranteed nationally in 2016 – a 12% increase from 2015 (631,142 loans). This total includes purchase loans, interest rate reduction refinance loans (IRRRL), and cash out/other refinance loans.
There were 353,002 purchase loans in 2016 – an estimated 10% increase from 2015 (322,115), and 287,884 purchase loans involved no down payment.
That’s 82% of VA purchase loans made in 2016 that had no down payment!
Additionally, first-time home buyers accounted for 42% of purchase loans.
The top three age brackets for most VA loans guaranteed were:
1. Ages 26-35 at 22.37%
2. Ages 36-45 at 21.91%
3. Ages 46-55 at 20.58%
The report shows a TOTAL loan amount of $178 Billion in 2016 with an average loan amount of $253,243.
VA Loans in Hawaii for Fiscal Year 2016
In 2016, VA loan purchase and refinance loans continued to rise in Hawaii:
- VA loan reports for Hawaii show the total number of VA loans (purchase + refinance loans) rose 15% in 2016 (6,094) from 2015 (5,293).
- The state of Hawaii saw 2,557 VA purchase loans in 2016 – an 8.6% increase from 2015 (2,354).
- Hawaii also saw a significant increase in refinance loans rising from 996 in 2014 –> 2,939 in 2015 –> 3,537 in 2016.
2016 Reflections & 2017 Outlook for VA Loans in Hawaii
Gabe Amey, Hawaii VA Loans Kapolei Branch Manager, reflects on the benefits the VA loan program has as a prime reason for 2016’s impressive increase:
“One of the main reasons we’ve seen a growth in VA purchases, particularly in Hawaii, is the typical hurdles towards homeownership are removed if you’re VA eligible. For instance, a VA eligible buyer doesn’t need a whole lot of money in the bank in order to close on a property.
In 2016, our Hawaii VA Loans’ home buyers who chose not to put a down payment, only came in with an average of $2,200 at closing to get their keys. That’s less money upfront than what it would typically cost them to rent a home with first month’s rent and a security deposit. That’s significant savings.”
The design and incentives of the VA home loan program are a credit to its success, because….
- they don’t require a down payment.
- they don’t require monthly mortgage insurance.
- lenders are allowed to provide loans to those with lower credit scores.
Additionally, low default rates are a testament to the intelligent way the program is designed and the nature of the veteran community.
Jim Owens, Hawaii VA Loans Kailua Branch Manager, reflects on 2016’s banner year for VA refinances.
“Global financial concerns and issues like the Brexit vote kept interest rates low once again and brought some significant variation in rates. When rates dropped, a lot of people with existing VA loans were able to use the IRRRL program to quickly and easily refinance to save money each month.
2017 has started with higher rates than we saw in 2016, if the economy continues to improve, expect that trend to continue. The rates will likely slow the refinance volume, but they are still low enough to keep home affordability near the historic levels we’ve seen over the past several years. As the popularity of the VA loan program grows, I expect to see another record year of VA purchase transactions.”
Hawaii VA Loans has been a local VA loan lender since 2007 with the mission to simplify the VA loan process for the military and veteran community. Our VA Loan Specialists and team members are driven to play a part in the increase of veteran homeownership in Hawaii and educate VA home buyers about their hard-earned benefits while serving their country. Furthermore, we are committed to seeing the trend continue in 2017.