🏡 The Lending Letter

Monday, May 25, 2026 — 🇺🇸 Special Memorial Day Edition 🇺🇸

VA Home Loans: The Mortgage Benefit 18 Million Veterans Still Haven't Used 🎖️ | Debt Avalanche vs. Debt Snowball: The $8,000 Difference Nobody Talks About 🏔️

Happy Memorial Day! 🇺🇸🌟 Today we pause to honor the men and women who gave everything so the rest of us could do things like argue about mortgage rates and stress about closing costs. The least we can do is make sure their fellow veterans are getting every financial benefit they've earned — which is exactly why today's deep dive is dedicated to the VA home loan: one of the most powerful mortgage products in existence that millions of eligible vets have never touched.

Markets are closed today. Rates are holding at 6.65% — same as Friday May 22, same as Thursday. No movement on a federal holiday. But here's the thing about holiday Mondays: they tend to be when people actually think about big financial moves, because for once, nobody's emailing you. So let's make this issue count. ☕🔥

📅 This Week's Economic Calendar — Eyes on Thursday

Markets reopen Tuesday, and this week actually matters for mortgage rates. Here's what to track:

🎯 Mark Thursday May 29. Core PCE — the Federal Reserve's preferred inflation measure — drops alongside Jobless Claims. If Core PCE comes in hotter than expected, that's upward pressure on mortgage rates. If it cools? Rates could pull back. This is the most consequential data point of the week for anyone shopping for a mortgage right now.

VA Home Loans: The Most Powerful Mortgage Benefit in America That Millions of Veterans Haven't Claimed 🇺🇸

Here's a fact that should genuinely bother you: according to the Department of Veterans Affairs, over 18 million veterans are eligible for VA home loan benefits — but fewer than 40% have ever used one. On Memorial Day, that feels like a story worth telling.

So let's fix that. Whether you're a veteran, an active-duty service member, a surviving spouse — or you know someone who is — here's what the VA loan actually is, what it costs (less than you think), and why it beats conventional financing in most scenarios.

What Is a VA Loan, Exactly?

A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs. The VA doesn't lend money directly — it guarantees a portion of the loan, which lets private lenders offer dramatically better terms. The guarantee typically covers 25% of the loan, which is why lenders don't require private mortgage insurance (PMI) even with zero down payment.

Who Qualifies?

Eligibility is based on service requirements:

• 90 consecutive days of active service during wartime
• 181 days of active service during peacetime
• 6 years of service in the National Guard or Reserves
• Surviving spouses of veterans who died in service or from service-related disabilities

You'll need a Certificate of Eligibility (COE) to apply, which you can request through your lender, through the VA's eBenefits portal, or by mail. Most lenders can pull this digitally in minutes.

The VA Loan Advantages — Side by Side

The Funding Fee — The One Real Cost

People sometimes hear "VA loan" and think it's free. It's not — there's a one-time VA Funding Fee that helps keep the program running. For first-time VA loan users putting 0% down, it's currently 2.15% of the loan amount. On a $400,000 loan, that's $8,600 — which can be rolled into the loan, so you're not writing a check at closing.

But here's the key exception: veterans with a service-connected disability rating of 10% or more are completely exempt from the funding fee. Zero. Nothing. This is one of the most under-claimed benefits in the VA loan program. If you know a veteran who's been rated for any disability, make sure they know about this exemption before they close.

Real-Dollar Example: Marcus, Army Veteran, Buying in Texas 🤠

The "Assumable" Angle — A Stealth Advantage Right Now

VA loans are assumable, meaning a future buyer of your home could take over your VA loan's interest rate — even if they're not a veteran. If you locked a VA loan at 6.65% today and rates climb to 8% in three years, your assumable VA loan becomes a massive selling point. It's a built-in marketability advantage most VA borrowers don't think about at origination.

5-Step VA Loan Action Plan 📋

1. Confirm eligibility — Check your service record against VA requirements
2. Get your COE — Your lender can pull this digitally in most cases
3. Check your disability rating — Even 10% exempts you from the funding fee
4. Shop VA-approved lenders — Rates and fees vary; get at least 3 quotes
5. Understand occupancy rules — VA loans require you to live in the home (no pure investment use)

Debt Avalanche vs. Debt Snowball: The $8,000 Difference — and Which One You'll Actually Stick To 🏔️

With mortgage rates at 6.65%, a lot of people are thinking about debt — how to manage it, pay it down, or position themselves for a better rate when they're ready to buy. Two strategies dominate the personal finance conversation: the Debt Avalanche and the Debt Snowball. And while one wins mathematically, the other wins psychologically. Here's everything you need to know to pick the right one for your actual life.

What's the Difference?

Real-Dollar Example: Priya's Debt Situation 💳

Priya has three debts and $500/month of extra cash to throw at them:

The Psychology Problem — and Why the Snowball Wins in Real Life

Here's the uncomfortable truth: the mathematically superior strategy only wins if you stick to it. Research from Harvard Business Review found that people who eliminate individual accounts faster (Snowball) are more likely to stay committed to the plan and become debt-free. Why? Because crossing a debt off your list entirely is a more powerful motivator than watching a large balance inch downward — even if the math says to ignore the small stuff.

The CFPB acknowledges this behavioral tension. Their guidance: if you have high-rate debt (24%+ credit cards), the Avalanche saves meaningfully more. If your rates are close together, the Snowball's motivational edge often compensates for its mathematical disadvantage.

The Mortgage Connection 🏠

Why does this matter to a mortgage newsletter? Two reasons:

1. Your debt-to-income ratio (DTI) directly affects what loan you qualify for and at what rate. Eliminating a $300/month loan payment can add $50,000–$75,000 to your qualifying purchase price at today's rates.
2. Your credit utilization (balances vs. limits on revolving accounts) is a major FICO driver. Paying down credit card balances — especially below 30% utilization per card — can move your score meaningfully within 30–60 days, potentially unlocking a better mortgage rate.

5-Step Debt Payoff Checklist ✅

1. List all debts — balance, rate, minimum payment for each
2. Know your extra cash — what can you realistically add above minimums each month?
3. Pick your strategy honestly — If you've quit debt plans before, Snowball. If you're motivated by math, Avalanche.
4. Automate minimums on everything — no late payments, no credit score dings
5. Redirect freed-up payments — when a debt is gone, that payment goes straight to the next target

🇺🇸 Memorial Day Weekend: This Is the Revenue Peak You've Been Building Toward All Spring

Memorial Day weekend is officially the #1 short-term rental revenue event of the first half of the year. According to AirDNA, STR occupancy and nightly rates during Memorial Day weekend regularly outperform even 4th of July in most beach and lake markets. The travelers are already there (or on their way). If you have an active listing, today and tomorrow are your last big chances to maximize this window.

Right Now — What STR Hosts Should Be Doing Today

The Summer STR Calendar — What's Coming Next

🏖️ One thing to do today: Open your hosting app right now and look at what's available in your market for June 19–21 (Juneteenth weekend). If it's sparse, you have an opportunity to price up. If it's full, price even higher — you have pricing power. STR success is 50% product, 50% calendar awareness.

That's your Memorial Day edition. 🇺🇸🌟 Honor the fallen, enjoy the grill, and come back Tuesday ready for a week that actually has some rate-moving data in it (PCE Thursday is not to be ignored). The next edition drops Tuesday, May 26.

Stay sharp out there — and if you know a veteran who hasn't looked into their VA loan benefit, today's a good day to send them this one. 🎖️

— The Lending Letter Team

🌐 lendingletter.com

Disclaimer: The Lending Letter is for informational and educational purposes only. Nothing in this newsletter constitutes financial, legal, investment, or mortgage advice. Mortgage rates, loan terms, and financial products change frequently and vary based on individual credit profile, lender, and market conditions. Always consult a licensed mortgage professional, financial advisor, or attorney before making financial decisions. Rate data sourced from Mortgage News Daily. VA loan eligibility and benefit details subject to change — verify current rules at VA.gov. Past performance of any financial strategy is not indicative of future results.