Eddie Valdivia and his wife Vanessa pose in front of their first house, which they bought with the help of a VA loan in October 2020.

Eddie Valdivia (34) and his wife Vanessa (36), a Red Cross employee, bought their first house in the middle of the pandemic last October.

It’s a three bedroom, three bathroom home on half an acre in Palmdale, California about 90 minutes outside of Los Angeles. Since Eddie is a veteran who served eight years in the Navy, the couple was able to obtain a VA purchase loan that allowed them to purchase the home with no down payment.

“That was a big deal,” said Valdivia, who also noted that VA loan rates – offered by private lenders and partially insured against default by the Department of Veterans Affairs – were better than standard rates, and that they could if a deposit of 20% had to be waived, the couple opened the doors.

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This is just one example of young military families taking advantage of their veterans to buy homes even in the glowing housing market before, during, and after the pandemic.

VA purchase credits for Generation Z veterans – typically ages 18 to 24 – rose 123% year over year, according to new VA data analyzed by Veterans United. Millennials seeking VA purchase loans were up 16% year over year.

In addition, loans from Millennial and Gen Z veterans accounted for 52% of all VA purchase loans granted in the first half of 2021, up from 47% the previous year, the analysis found.

“The growth is there and veterans absolutely have roots in communities across the country,” said Chris Birk, director of education at Veterans United, a homebuyer lender.

Veteran loan comes in for a great help

VA purchase loans are a benefit that has helped many veterans, service members, and eligible military spouses buy or refinance homes. Those who get them do not have to file any money or purchase personal mortgage insurance – a great help to many young home buyers.

They also offer competitive rates compared to traditional loans. The average rate on a 30 year VA fixed rate loan is around 2.75%, according to Bankrate. For a traditional 30-year non-veteran fixed-rate mortgage, the average interest rate is around 3%, according to Bankrate.

“It’s incredibly beneficial to the buyer,” said Birk.

Of course, the blistering housing market has also made it difficult for home buyers to find homes, largely due to a lack of inventory. In the highly competitive environment, some veterans using VA purchase loans have had additional difficulty buying homes due to some misunderstandings about the loans.

“Not every home seller is open to even considering the possibility of a fun offer on a VA loan,” said Birk, adding that in this case, there isn’t much a veteran can do to convince them.

“The common misconception is that VA loans will last forever, and they will default, and that there will be valuation issues, and that’s just not true anymore,” said Caitlin Turkovich, a manager at Union Home Las Vegas Mortgage, who works with seasoned home buyers.

What Military Home Buyers Should Expect

There are a few things Turkovich recommends to veterans and active duty members looking to get their VA loan service.

The first is to find a lender who is experienced with VA loans and can help ensure that processing goes smoothly and quickly. For example, Turkovich’s average completion time on a VA loan is 26 days compared to 28 days on a traditional loan, she said.

She also said that in today’s marketplace, homebuyers should be ready to make multiple bids on homes before receiving one and that they have no time to hesitate when they see a home they want to buy.

“There’s a line out there that says, ‘If you have to sleep on it, you won’t sleep in it,'” she said.

Additionally, people taking a VA loan may consider paying a down payment if possible, as this could offer a discount on financing fees and potentially lower monthly payments and could set the buyer apart from the competition. In some states, it is also possible to write a so-called love letter to the seller to express your interest in a home.

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