VA Mortgages Reach Highest Level Since 1994

Mortgages guaranteed by the Department of Veterans Affairs reached their highest level since 1994 after rising by 50% in the most recent fiscal year.

Originations for VA loans have risen as interest rates have dropped, subprime lending has dried up and credit standards for conventional financing have tightened.

For the fiscal year that ended Sept. 30, the department guaranteed almost 540,000 loans, up roughly 300% from five years ago. Roughly 338,000 of those loans were for refinancing.

VA home loans offer a no down payment option for qualified borrowers, something that is not available on Fannie Mae and Freddie Mac mortgages.

Mortgage bankers issued $388 billion of Ginnie Mae MBS in fiscal year 2012 (which ended Sept. 30), up 11% from FY 2011, according to new figures released by the secondary mortgage agency.

FHA and VA-backed mortgages are the collateral for GNMA MBS.