Despite a strong desire for homeownership, many U.S. veterans remain on the sidelines due to widespread misunderstandings about the Department of Veteran Affairs (VA) home loan program, according to a recent survey.
The survey, conducted in early 2026 by Researchscape on behalf of mortgage lender NewDay USA, polled over 1,200 current and former military service members. It found that while 63% of respondents are aware of the VA home loan benefit, significant confusion remains regarding how the program actually works.
About 1 in 3 veterans reported receiving little to no education about the benefit during or after their military service, and 30% remain unsure if they even qualify.
This lack of education has led to costly misconceptions. According to the survey data, 49% of veterans currently feel homeownership is out of reach, heavily influenced by perceived upfront costs.
When asked about downpayment requirements for VA loans, 30% of respondents incorrectly believed one was required, and 38% were simply unsure. Only 32% correctly identified that the VA allows eligible borrowers to purchase a home without a downpayment.
Private mortgage insurance (PMI) is another major area of confusion. Although VA loans do not require PMI regardless of the downpayment size, only 23% of surveyed veterans understood this fact, while 30% believed it was required.
Additionally, just 42% knew that the tax-free Basic Allowance for Housing benefit can be counted toward income qualification — a crucial factor that lenders often highlight during underwriting to boost a buyer’s purchasing power.
These misunderstandings are actively preventing market participation at a time when affordability is already strained. Survey respondents cited rising home prices (62%), income concerns (55%) and saving for upfront costs (49%) as their primary barriers to buying.
The NewDay USA report noted that only 21% of non-homeowners are highly likely to buy a home in 2026 when factoring in traditional downpayments and closing costs. However, if those upfront costs were removed — as the VA loan essentially does regarding the downpayment — the share of veterans ready to purchase a home nearly doubles to 40%.
While the survey data suggests better education could dramatically shift homebuying activity among veterans, it also reveals that the untapped financial utility of the VA benefit extends beyond initial purchasing. Only 36% of respondents knew a VA cash-out refinance could be used to pay off high-interest debt, despite 41% of those surveyed carrying varying levels of high-interest debt balances.
