VA Loans Outperform FHA Loans. Why? And What Can We Learn?

Posted: 13 Jun 2016

See all articles by Laurie S. Goodman

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center

Ellen Seidman

The Urban Institute

Jun Zhu

Urban Institute

Date Written: May 25, 2016

Abstract

While Veterans Administration (VA) mortgages and Federal Housing Administration (FHA) mortgages are often lumped together as “government mortgages”, the programs have significant differences, as do the borrowers who use them. In addition, delinquency rates on VA loans have consistently been much lower than on FHA mortgages, even after correcting for borrower characteristics. In this paper, we look at the programs, the profiles of the borrowers, and default rates to identify lessons from the favorable VA experience that can be incorporated into FHA or other programs.

Suggested Citation

Goodman, Laurie S. and Seidman, Ellen and Zhu, Jun, VA Loans Outperform FHA Loans. Why? And What Can We Learn? (May 25, 2016). Journal of Fixed Income, Vol. 24, No. 3, 2015. Available at SSRN: https://ssrn.com/abstract=2784271

Laurie S. Goodman

The Urban Institute - Housing Finance Policy Center ( email )

2100 M Street NW
Washington, DC 20037
United States

Ellen Seidman

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Jun Zhu (Contact Author)

Urban Institute ( email )

2100 M Street N.W.
Washington, DC 20037
United States

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