Department of Veterans Affairs mortgages hit $150 billion in 2015, up about 30 percent from the $115 billion of mortgages guaranteed in 2014. That’s right in line with the increase the nationwide mortgage market registered that year.
Originations (excluding purchases) did not quite hit 50 percent in 2015, with $307 billion in applications for an originations rate of 49 percent. Some 600,000 mortgages were originated out of 1.3 million applications, according to a Home Mortgage Disclosure Act report from LendingPatterns™, up from the nearly 500,000 guaranteed in 2014.
Looking at origination dollars, whites got 66 percent of the funding ($99 million), and minorities 22 percent, with the balance falling in the unknown category. Blacks were the largest minority group for VA mortgages, at 10.5 percent ($16 billion) followed by Hispanics at eight percent, the HMDA data show.
Since VA loans and Federal Housing Administration mortgages are routinely packaged into Ginnie Mae securities, it is not surprising that Ginnie Mae was the leading investor in VA loans on the secondary market in 2015, at 59 percent. Basically none of this product was bought by their fellow agencies, Fannie Mae and Freddie Mac. But there was a large non-agency sale volume, fully a third (34 percent) of the market. And some loans were kept in portfolio by lenders and not sold, about seven percent.
Average loan amount on a first lien was $245,000, with subordinate liens averaging $108,000. Nearly 20 percent of volume was in jumbo mortgages, with 81 percent in conforming mortgages.
Veterans overwhelmingly bought or refinanced owner-occupied properties rather than those suitable for investment. Just 1.2 percent of 2015 mortgage dollars went to non-owner occupied properties. The purchase/refi split favored purchase mortgages slightly, at 53 percent to 45 percent. Just 1.5 percent of the money went to home improvement loans.
One-to-four family homes dominated property type, with more than 99 percent of VA mortgage dollars going for single-family mortgages.
Upper income borrowers dominated in VA lending for 2015. The 42 percent share was nearly double the next category, middle income borrowers. The low- and moderate-income categories combined made up 11.5 percent of dollars.
Looking at the gender rollup (applications with at least one male versus apps from females with no male), male veterans dominated, at 88 percent. Female veterans were granted six percent of 2015’s VA guarantees.
Looking at 2015 VA volume by numbers of mortgages, most of the category percentages are similar to the dollar categories. Upper income borrowers were a smaller percentage, at 34 percent. White borrowers got a slightly higher percentage of the total, at 68 percent. Low- and moderate-income borrowers got a higher percentage of loans, at nearly 17 percent.
(Mark Fogarty is a journalist and analyst who has been covering the mortgage industry for more than 30 years.)