The Department of Veterans Affairs guaranteed $68.2 billion of single-family loans in the fiscal year that ended Sept. 30, an 80% spike from the preceding year.

Refinancings drove most of the increase, with the agency guaranteeing 144,800 transactions. In the previous fiscal year it backed 37,300 refis.

Purchase mortgage transactions rose 27%, to 180,900 loans.

Volumes aside, VA officials seem most pleased with the performance of the new loans. "We outperform every other product on the market, including prime loans," said Mark Bologna, the director of the VA home loan guarantee program.

The agency's "seriously delinquent" rate is 4.69%, compared to 5.44% for prime loans, according to the latest data compiled by the Mortgage Bankers Association.

VA officials contended that one reason for the good performance is that the agency did not bend to industry pressure during the housing boom to let loan officers and mortgage brokers select their own appraisers. VA approves, monitors and selects appraisers.

This has resulted in "good, solid values," Bologna said. "It has proven to be a good decision."

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