Buying a Home With a VA Loan in a Slow Market: Where Your Leverage Is

Rates are back above 7%, and a lot of people have decided it's a bad time to buy. Some of them are right. But a slower market changes who has the leverage, and the VA loan has a few tools built for exactly this kind of market that most buyers never use.

I haven't used my VA loan yet. I plan to. So I've been watching this closely, the same way you probably are.

What a slow market actually means for you

In September 2026, homes sold at a 3.99 million annual pace, down 2.2% from a year earlier, and there was a 4.8-month supply of homes for sale, up from 4.5 months the year before (NAR). Prices haven't crashed. The national median was $417,500, still up 1.3% from a year ago. What changed is time: homes are sitting longer, and NAR's own chief economist says that gives buyers more room to negotiate.

You can see it in the deals. Redfin found sellers gave buyers some kind of concession in 46.2% of home sales this spring, the highest spring share since it started tracking in 2019.

The rate side is the hard part. The 30-year fixed averaged 7.40% in early October, up from 6.30% a year earlier (Freddie Mac). So the goal in this market isn't to wait for perfect. It's to use every lever you have.

Lever 1: Ask the seller to pay your closing costs

VA lets the seller cover some or all of your closing costs, and it doesn't put a cap on those credits. In a market where homes sit, asking for this is normal, not rude. The worst answer is no.

Lever 2: Use the 4% seller concession

On top of closing costs, VA allows seller concessions up to 4% of the home's reasonable value (the number on your VA Notice of Value). A concession is anything of value the seller adds at no cost to you. VA's own examples: paying your VA funding fee, paying off some of your debt, or prepaying your homeowners insurance.

Here's why that matters. On a $417,500 home with no down payment, the first-use funding fee is 2.15%, about $8,976. Four percent of that home's value is $16,700. In a slow market, a seller who wants the deal done could cover your whole funding fee and still have room left under the cap. (Example numbers. Your price, fee, and value will differ.)

If you receive VA disability compensation, you don't pay the funding fee at all, so the concession room can go somewhere else. File your claim before you separate; I covered that in 7 Things Every Veteran Should Know About Filing a VA Disability Claim.

Lever 3: Look for a VA loan you can take over

VA loans are assumable. If a seller has a VA loan from when rates were lower, you may be able to take over their loan, rate and all.

Simple example: a $300,000 balance at 3% costs about $1,265 a month in principal and interest. The same balance at 7.40% costs about $2,077. That's $812 a month. (Simplified: same balance and same 30 years.)

Three things to know before you chase one:

• You pay the seller's equity. If the home sells for $400,000 and the loan balance is $300,000, the $100,000 difference comes from you, in cash or a second loan. That's the catch.
• The servicer has to approve you, and VA charges a 0.5% funding fee on the balance, paid at closing. It can't be rolled into the loan.
• The seller's entitlement can stay tied up. If you're an eligible veteran who will live in the home, you can substitute your entitlement for theirs. If you can't, their entitlement stays with the loan until it's paid off. Sellers who know this may say no, so ask early.

Lever 4: Plan the refinance, but don't count on it

If rates drop after you buy, the VA IRRRL lets you refinance to a lower rate with less paperwork than a normal refinance. The rules are in VA IRRRL: The Refinance Benefit Built for When Rates Drop. Buy a payment you can carry at today's rate. A lower rate later is a bonus, not the plan.

Rent and invest the difference

The honest objection to buying right now: renting might be cheaper, and you could invest what you save. Sometimes that's true. Run it with your own numbers.

Owning, per month: principal and interest, property taxes, insurance, and maintenance. On the $417,500 example above, principal and interest alone is about $2,953 at 7.40%, and in the first month about $2,630 of that is interest.

Renting, per month: rent plus renter's insurance.

If renting costs less, the plan only works if the difference actually gets invested every month, automatically, before you can spend it. If it just disappears into everyday spending, the renter falls behind.

For military families, add two questions:

• How long will you be there? If a PCS is likely in two or three years, the costs of buying and selling can eat whatever you'd build.
• Could it be a rental later? A home you can rent out when orders come can keep working for you. Run that math before you buy, not after the orders drop.

Your checklist

• Get your Certificate of Eligibility now (How VA Home Loans Actually Work walks through it).
• Get preapproved and know your payment at today's rate.
• In your offer, ask for closing costs, then use the 4% concession room.
• Ask your agent to look for homes with an assumable VA loan.
• Run rent vs. buy with your own numbers, including your likely PCS date.
• Keep a separate house fund for earnest money, the inspection, and anything the seller won't cover (6 Financial Goals Worth Setting in Your 30s has the list).

A slow market won't hand you a deal. It hands you leverage. Use it.

Sources and further reading: VA, VA funding fee and loan closing costs; VA Home Loan Guaranty Buyer's Guide; VA Circular 26-23-10 (assumptions); Freddie Mac, Primary Mortgage Market Survey (Oct 8, 2026); NAR, Existing-Home Sales, September 2026; Redfin, home seller concessions; checked October 2026.

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Disclaimer: I am not a financial advisor. The information provided here is for educational purposes only and should be verified independently. See the full Disclaimer.