The Direct Answer
2025 loan origination (close) rates by loan type — Source: Polygon Research, HMDAVision, 2025 HMDA Modified LAR Data
VA loans are not denied more often than other loan types. They are denied less often - significantly less. According to 2025 Home Mortgage Disclosure Act (HMDA) data analyzed across 138 million loan-level transactions by Polygon Research, VA purchase loans have an 8.2% denial rate, the lowest of any major mortgage product on the market.
Conventional loans are denied at 15.0%. FHA at 12.8%. USDA at 12.5%.
This is not a close comparison. VA loans are denied at nearly half the rate of conventional loans - and that gap has held every single year since 2018.
Where the Myth Comes From
The belief that VA loans are risky or hard to close typically comes from one of three places: a listing agent who had a bad experience years ago, a seller who heard it secondhand, or a lender who doesn’t specialize in VA and fumbled the process. None of those are data points. They are anecdotes - and the federal data tells a different story.
In Hillsborough and Manatee counties, this misconception costs veterans real money. When a listing agent advises a seller to reject a VA offer in favor of a conventional one, they are making a recommendation that contradicts what the numbers actually show. A conventional buyer is almost twice as likely to get denied as a VA buyer.
The 2025 Numbers
The table below is drawn from 2025 HMDA Modified LAR data, purchase loans on 1-4 unit properties, as analyzed in the 2026 Vetted VA and Polygon Research white paper.
| Loan Type | Denial Rate | Origination Rate |
|---|---|---|
| VA | 8.2% | 90% |
| FHA | 12.8% | 85% |
| USDA | 12.5% | 84% |
| Conventional | 15.0% | 81% |
Source: Polygon Research, HMDAVision, 2025 HMDA Modified LAR Data, Purchase, 1-4 units.
The origination rate is equally telling. When a VA loan reaches an underwriter’s desk, it closes 90% of the time - higher than every other loan type. That is not what a risky product looks like.
Eight Years of Consistent Data
This is not a one-year anomaly. Polygon Research tracked VA and conventional denial rates from 2018 through 2025, and VA has come in lower every single year:
- 2018: VA 10.0% vs Conventional 13.1%
- 2021: VA 8.1% vs Conventional 11.9%
- 2023: VA 9.3% vs Conventional 13.9%
- 2025: VA 8.2% vs Conventional 15.0%
While conventional denial rates have actually increased since 2022 - peaking at 16.0% in 2023 before settling at 15.0% in 2025 - VA denial rates have remained stable and low throughout the same period.
The Minority Gap: VA Wins Here Too
One of the more significant findings in the 2025 data is how VA loans perform for minority borrowers compared to other loan types.
Every loan type shows a gap between the denial rates of minority applicants and non-Hispanic white applicants. VA has the smallest gap of any major loan type:
| Loan Type | Minority Denial Gap |
|---|---|
| VA | 3.7 points |
| USDA | 5.1 points |
| FHA | 5.9 points |
| Conventional | 9.1 points |
For minority veterans in Hillsborough and Manatee counties, the VA loan provides better access to homeownership than any other product available to them - not by a small margin, but by a substantial one. The minority origination rate for VA loans is 87%, compared to 75% for conventional.
What This Means If You Are Buying in Tampa Bay
If you are a veteran making an offer on a home in Hillsborough or Manatee County, and a listing agent or seller pushes back on your VA financing, the objection is not supported by the data. You have the right to know that, and a good buyer’s agent should be prepared to make that case on your behalf.
If you are a seller or listing agent reading this: a VA buyer with a strong pre-approval from a VA-specialist lender is statistically more likely to close than a conventional buyer. The paperwork is different. The process has specific requirements. But the outcomes favor VA.
The risk is not in the loan type. The risk is in choosing a lender who does not know how to work it.
Other VA Loan Myths Worth Knowing
This post is part of a series addressing the most common misconceptions about VA loans, drawn from the 2026 Vetted VA and Polygon Research white paper analyzing 138 million loan transactions.
- Myth #2: VA loans are expensive for veterans - The full cost picture
- Myth #3: People with weak financial backgrounds use VA loans - The wealth data says otherwise
- Myth #4: FHA or conventional loans are better for veterans than VA loans - The side-by-side comparison
- Myth #5: VA loan appraisals are slow and come back low - What the process actually looks like
- Myth #6: Sellers have to pay all closing costs on a VA loan - What the 4% rule actually means
- Myth #7: VA loans can only be used once - How entitlement actually works
Work With a VA Loan Specialist in Tampa Bay
I am a licensed mortgage broker in Florida serving veterans in Hillsborough and Manatee counties. If a seller or agent is pushing back on your VA offer, or if you want a pre-approval letter that addresses the most common objections upfront, reach out.
Michael Payne | NMLS #2284716 Book a call | Learn about VA loans
Source: 2026 VA Loans White Paper - Addressing VA Loan Misconceptions & Validating Why You Should Work with Veterans. Vetted VA and Polygon Research. Data based on 2025 HMDA Modified LAR, analyzed via HMDAVision, updated April 2026.