The U.S. military has long been heralded as an equalizer, providing opportunities for individuals from diverse backgrounds to advance their careers and secure a stable future. Its role extends beyond professional development, significantly impacting economic outcomes, particularly in homeownership and income, for its service members and military rentals veterans.
A report by the Urban Institute, The Impacts of US Military Service on Homeownership and Income, highlights how military service can mitigate racial and ethnic disparities in these areas. According to the report, veterans generally exhibit higher homeownership rates and incomes compared to the general population, with particularly pronounced benefits for people of color.
Homeownership has traditionally been a primary vehicle for wealth accumulation in the United States. Yet, significant racial disparities exist in homeownership rates, contributing to the broader racial wealth gap. For instance, veteran households have a homeownership rate of 78%, significantly higher than the 64% for the general population. Moreover, among Black households, the homeownership rate for veterans is 54% compared to just 35% for non-veterans. Hispanic veteran households have a homeownership rate of 65%, compared to 45% for their non-veteran counterparts.
The military’s VA home loan program, which offers affordable mortgages without requiring a down payment or mortgage insurance, plays a crucial role in enabling service members and veterans to purchase homes. The VA home loan certificate of eligibility and understanding VA loan requirements are essential steps in this process.
Truevana, a Black and veteran-owned company, exemplifies the transformative power of military benefits. The company’s CEO and former Green Beret, Michael McDonald, leveraged his VA home loan to purchase multi-family properties while serving, thus laying the groundwork for financial stability and wealth creation. He reflects, “Using my VA loan to invest in real estate was a game-changer. It allowed me to secure properties that would have been out of reach otherwise, setting a solid foundation for my future.”
Income disparities also see a significant reduction through military service. The report shows that veteran households have a median income of $66,800, which is $8,800 higher than that of non-military households. This income boost is even more substantial for active-duty service members, whose median household income stands at $71,000. This increase in income is crucial for minority households, who generally face larger income gaps in the civilian workforce.
For Black households with an active military member, the household income is 40% higher than those without. Similarly, Hispanic military households see an 18% income increase. The military’s structured pay scales, Basic Allowance for Housing (BAH), and the provision of benefits such as housing, healthcare, and education contribute significantly to these income gains.
McDonald underscores the importance of these benefits, stating, “I started Truevana to help fellow service members navigate their benefits and build wealth for themselves and their families. The financial tools provided by the military can be a powerful equalizer, but only if we know how to use them.”
The Urban Institute’s findings reveal that the military’s impact on homeownership and income extends beyond individual gains, contributing to broader societal equity. By providing stable employment, financial benefits, and access to affordable homeownership, military service emerges as a pivotal factor in reducing racial and ethnic economic disparities.
As the nation continues to grapple with issues of economic inequality, the military’s role in fostering financial stability and narrowing racial gaps in homeownership and income offers valuable lessons and a model for other sectors to follow. The stories of veterans and active-duty service members who have successfully leveraged their military benefits to build wealth are not just inspiring but also a testament to the transformative power of service. Whether through PCS moving, finding military rentals, or understanding PCS tips, the journey of military moves and using the VA Loan Property Requirements can significantly enhance financial outcomes for service members.