Millennial homebuyers are looking for ways to lower the down payment needed to buy a house, leading many to consider a VA home loan.

The program is backed by the Department of Veterans Affairs. 

a military woman holding her child smiling big because millenial veterans can get a VA loan with little to no downpayment

It helps to level the playing field toward homeownership for veterans, service members and eligible family members.

And it’s working.

After all, VA loans let you get into a house with zero down.

That’s why it’s no surprise that the VA backed 1.2 million loans in fiscal year 2020. 

It’s the first time in the history of the 76-year program that it’s guaranteed more than 1 million loans, and a significant portion was given to Millennial veterans.

What’s behind this record-breaking growth in VA home loans? 

VA loan experts at the Wendy Thompson Team are looking at how VA loans are helping Millennials secure low down payments.

Millennial Homebuyers Are on the Rise

The Millennial generation faces different obstacles to homeownership than generations that came before. 

Credit card debt is a factor, with the average household having nearly $6,200 in credit card debt in 2019. 

However, the most significant financial drain is student loan debt. The average Millennial has a student loan balance of over $34,000

But some borrowers, such as physicians and dentists, can have balances of $300,000 or more.

Still, Millennial homebuyers are on the rise and are emerging as a driving force in the housing market. 

And by the end of 2019?

Millennials accounted for nearly 50% of all home loan originations.

That includes all home loans such as FHA loans, backed by the Federal Housing Administration, conventional mortgages and VA loans.

While FHA loans can offer down payments of 3.5% and some conventional loans can go as low as 3% for a down payment requirement, VA loans take the cake…

They don’t require a down payment at all. 

And it’s this no-down payment option of VA loans that makes it an excellent choice for Millennials. 

VA Home Loan Quote

Average Income for Millennials Has Gone Up

Millennial households earn an average income of $69,000, according to a Pew Research Center analysis.

The analysis also shows they’re earning more than any young adult household made at nearly any time over the past 50 years.

But Millennials didn’t start their careers with high earnings.

You see, many came of age and entered the workforce during the Great Recession.

It’s the period from 2007 to 2009 in which the US saw the most severe economic recession since the Great Depression in the 1930s.

And poor economic performance leads to lower wages and fewer jobs being available.

Many struggled to get jobs as recently as 2016 when records show the Millennial unemployment rate was 12.8% compared to the national average of 4.9%.

Now, Millennials are the largest generation in the workforce.

They also make up a significant portion of select industries according to an analysis by LiveCareer:

  • 60% of bartender employment

  • 59% of veterinary assistants

  • 56% of waiters and waitresses

  • 55% of bank tellers

And if you look at the Bureau of Labor Statistics, you’ll see that most of those industries are projected to increase through 2029 - some by as much as 16%!

How Many VA Loans Are Held by Millennials?

VA loans are attractive to Millennial veterans because it doesn’t require a down payment. You also save money because VA loans don’t require mortgage insurance.

That still leaves interest rates as the wildcard for getting a VA loan.

However, the economic downturn caused by COVID-19 has driven interest rates to historic lows

And when you combine low rates with the zero down payment option of a VA home loan?

It’s a recipe of record growth for VA loans.

The program backed more than 1 million VA loans during the 2020 fiscal year, and many went to Millennials.

Even though they’re often burdened with student debt, Millennial veterans, along with those from Generation Z, made up half of all VA loans in fiscal year 2020.

Most Popular Cities with VA Home Loans for Millennials

Cities throughout the US are seeing the number of VA loans rise. For instance, the number of VA loans in the Chicago metropolitan area doubled from 2019 to 2020.

Some areas are more popular than others for Millennial and Generation Z buyers.

Although Virginia Beach had the most VA loans overall, the top five cities that issued the most VA home loans are:

  • Virginia Beach: 8,532

  • Washington, DC: 6,970

  • San Antonio: 4,919

  • Dallas-Fort Worth: 4,791

  • Colorado Springs: 4,770

Other cities also saw VA loans being issued in record numbers. For instance, Sacramento had the biggest year-over-year gain, followed by Fayetteville, NC.

sample VA loan Rates by Credit score: 600 to 620 

Fico score


Mo. Payment

760 - 850

3.125 %


700 - 759

3.125 %


680 - 699

3.25 %


660 - 679

3.25 %


640 - 659

3.5 %


600 - 639

3.625 %


*Updated 10/15/19 - Rates are based on a $250,000 loan with a 20% down payment.  Rates change often and differ based on your state, down payment, and loan amount.  

Keep in mind that rates constantly change so it is best to contact us directly for the correct rate.

Why VA Loans are Good for Millennials

If you’re a Millennial, you’ve likely seen your fair share of hardship. Entering the workforce in the wake of the Great Recession could have caused setbacks from the beginning of your working years.

You’ve also had more student debt than any generation before.

But for Millennial veterans, VA loans can be the key that unlocks the path to homeownership.

And The Wendy Thompson Team is here to guide you.

Discover what you need to be eligible for a VA loan and how easy it is to qualify thanks to flexible credit requirements.

Want to know how much home you can afford?

We’re here to help. Get pre-approved now, with no strings attached.

The Tactical VA Loan Blueprint