Jacksonville sees massive spike in VA loan utilization

VA Loan Image - Jacksonville sees massive spike in VA loan utilizationSept. 4, 2020 (Courtesy of the Jacksonville Business Journal)

The number of Department of Veterans Affairs-backed loans issued in Jacksonville has surged as interest rates have tumbled, with the amount of loans issued in Jacksonville in the past nine months more than double the same period the previous year.

The increase locally is in line with a jump in VA loan utilization across the country, with the number of loans jumping 114% nationwide.

Jacksonville has seen a 102.7% increase. Elsewhere in Florida, Orlando’s VA loan utilization jumped 103% and Miami’s 116.5%.

A surge in loan refinancing is driving the increase, as veteran homeowners across the country continue to capitalize on historically low interest rates, according to Veterans United Home Loans, a mortgage lender that specializes in VA loans and who analyzed data from the federal government.

Through the first three quarters of 2020, VA refinance loans have increased 315% year over year. Purchase loans were up 11.5% year over year.

In all, the VA loan program backed more than 865,000 loans in the first three quarters of its fiscal year, which starts in October, putting the program on pace to guarantee more than 1 million loans this fiscal year. The previous record of 740,386 loans was set in 2017, according to VA data.

VA loans were already up in the first two quarters of the fiscal year, with demand staying high in the third quarter, which started in April. While the coronavirus has slowed the process of securing a VA loan in some places, the pandemic did little to tamp down demand in the weeks and months that followed, according to Chris Birk, director of education at Veterans United Home Loans: In the third quarter, refinance loans were up 296% year over year and purchase loans were up 7%.

In the third quarter, 35 metro areas saw total VA loans more than double compared to the same period last year. Six markets experienced year-over-year growth in excess of 150 percent, Birk said.

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