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On Thursday, mortgage rates data from Mortgage News Daily (MND) showed that the 30-year fixed rates for government loans fell below 6%.
As of Thursday afternoon, the average Federal Housing Administration (FHA) loan rate was 5.97% and the U.S. Department of Veterans Affairs (VA) rate was 5.99%. Mortgage News Daily also reported 15-year fixed rates at 5.70%.
The growing appetite for government loans are following the lead of conventional mortgages, as rates for conventional loan products have dropped to a new low for 2025 at 6.27%, according to MND. That’s in spite of Thursday’s Consumer Price Index (CPI) inflation report showing that prices in August rose faster on a monthly and yearly basis than they did in July.
Activity across all mortgage types jumped this week, according to data from the Mortgage Bankers Association (MBA)’s weekly mortgage applications survey for the week ending Sept. 5. Applications increased 9.2% from one week earlier.
By product type and activity, the VA loan share increased to 15.3% while the FHA loan share dipped slightly to 18.5%, a figure that is likely to change trajectory given sub-6% rates.
Several large lenders have noticed the shift for government loan appetite. A United Wholesale Mortgage spokesperson told HousingWire that loan volume at UWM has increased significantly, with government loans accounting for a healthy portion of that growth. “The recent rate drops have encouraged consumers across the board to move off the sidelines and take advantage of the numerous refinance and purchase opportunities available today. It’s a busy and exciting time for UWM and our partners, and we believe this momentum will continue to build,” they said.
A spokesperson for Newrez also confirmed a “notable increase” in demand for FHA and VA loans, driven by lower interest rates.
Scott Bridges, chief consumer direct production officer at Pennymac, said that the shift in rates has opened up the choices borrowers have.
“With the recent rally in the ten-year bond, we are seeing more VA and FHA borrowers taking advantage of lower rates, and saving money on a new mortgage, often below 6%,” Bridges said. “Given the incredible difficulty of predicting which direction rates will go, every customer needs to make their own decision if a refinance makes sense.”
Editor’s note: This story was updated with comments from UWM, Newrez and Pennymac.
