VA Loan Origination Trends and What They Mean for Buyers
VA loan originations hit record levels during 2020-2022. That surge created the massive pool of low-rate assumable loans that buyers are now accessing. Understanding the origination trends helps you understand where the best deals are today.
The Numbers
2019: Approximately 620,000 VA loan originations 2020: Approximately 1.2 million VA loan originations (record high) 2021: Approximately 1.4 million VA loan originations (record shattered) 2022: Approximately 740,000 VA loan originations (rates started rising) 2023-2025: Volume returned to 500,000-600,000 range as rates stayed high
During 2020-2021, two things happened simultaneously: rates hit all-time lows and VA loan demand surged. Service members and veterans locked in rates between 2.0% and 3.0% at historic volumes.
The Refinance Wave
It wasn't just purchases. The VA Interest Rate Reduction Refinance Loan (IRRRL) program saw massive activity. Veterans who already had VA loans refinanced to sub-3% rates, sometimes doing it multiple times as rates dropped.
This means even veterans who bought their homes in 2018 or 2019 at 4%+ rates often refinanced into the 2s. Their current rates are just as low as someone who purchased in 2021.
What This Means for Today's Buyer
All those VA loans originated and refinanced at 2-3% are now 3-5 years old. Service members rotate stations every 2-4 years. Veterans change jobs, grow families, divorce, and relocate. When they sell, their low-rate VA loans become available for assumption.
The pipeline of assumable VA inventory is directly tied to those origination volumes. 2020-2021 was the peak. Properties from that vintage are hitting the market now and will continue to for years.
Geographic Concentration
VA loan origination concentrates near military installations. In Colorado:
- Colorado Springs (Fort Carson, Peterson, Schriever): Highest VA loan density in the state
- Aurora (Buckley Space Force Base): Significant VA loan presence
- Denver metro: General veteran population
Nationally, the highest VA loan concentrations are around Virginia Beach, San Diego, San Antonio, Jacksonville, and of course, Colorado Springs.
If you're willing to buy near a military base, your assumable inventory will be much larger.
The Aging Factor
As these loans age, two things happen:
- Equity builds, creating larger equity gaps (the loan balance decreases while home values increase)
- Terms shorten, reducing the total years of savings remaining
The sweet spot for assumption value is loans that are 3-5 years old: enough time for the rate advantage to be significant, but still 25+ years remaining on the term. That's exactly where most of the 2020-2021 vintage loans are right now.
This window gradually shifts. In 5 years, those same loans will have 20 years remaining instead of 25. Still valuable, but less so.
Browse VA assumable properties in Colorado while the terms are long and the rates are low.
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Frequently Asked Questions
Can non-veterans assume VA loans?
Yes. Non-veterans can assume VA loans. You don't need military service. You need to qualify financially (credit, income, DTI) with the loan servicer. The seller's VA entitlement stays tied to the loan if a non-veteran assumes it.
What happens to the seller's VA entitlement when their loan is assumed?
If a non-veteran assumes the loan, the seller's entitlement stays tied to the property until the loan is paid off. If a veteran assumes and substitutes their own entitlement, the seller's entitlement is released for future use.
What credit score is needed to assume a VA loan?
Most servicers require 620+ for VA assumptions. The VA itself doesn't set a minimum, but lenders do. Your DTI should generally be under 41%.
How long does a VA loan assumption take?
VA assumptions typically take 45-90 days. Servicers familiar with VA loans (USAA, Navy Federal, Veterans United) tend to process faster. Smaller banks can be slower.
What are the fees for assuming a VA loan?
VA assumption fees are minimal: typically a $300-$500 assumption processing fee plus standard closing costs (title, recording, prepaid items). No VA funding fee applies to assumptions.
Do I need a Certificate of Eligibility to assume a VA loan?
No. Non-veterans don't need a COE to assume a VA loan. Veterans assuming the loan may want to substitute their entitlement to release the seller's, which requires their own COE.