FHA and VA Loans Show the Sharpest Increases

Mortgage delinquencies are increasing nationwide, with FHA and VA loans facing the greatest challenges. This trend points to deeper financial pressures affecting first-time buyers, military families, and low-to-moderate-income households. At LBC Mortgage, we help clients navigate these uncertain times with personalized solutions, clear guidance, and expert loan support.

Government-backed mortgages have become more vulnerable to delinquency compared to conventional loans. FHA delinquencies have surged more than 70 basis points, while VA loans are up by nearly 60. In contrast, conventional loan delinquencies have only edged higher by a minimal amount. This gap underscores how economic strain is falling hardest on those who rely on government loan programs.

FHA Borrowers Facing Higher Risks

Why FHA Borrowers Are Struggling

FHA loans are popular among first-time buyers due to lower down payment requirements and flexible credit criteria. But these same features mean borrowers often enter homeownership with less financial cushion. When living costs rise or job income dips, FHA borrowers may be more likely to miss a mortgage payment.

At LBC Mortgage, we work closely with FHA borrowers to review their loan terms and explore alternatives such as refinancing or loan modification. Our goal is to help clients remain in their homes, even during financial hardship.

Escrow Shortages and Higher Costs

Another challenge for FHA borrowers is rising escrow costs. Property taxes and homeowners insurance premiums have climbed steadily in many states, especially in places like Florida, Texas, and California. This results in higher monthly payments, even if the loan itself hasn’t changed.

Escrow shortages can cause payment spikes that catch homeowners off guard. Our loan advisors at LBC Mortgage help clients anticipate these changes and adjust accordingly to avoid delinquency.

VA Loans Under Pressure

Military Families Hit by Economic Headwinds

VA loans, designed to support military service members, veterans, and their families, have also seen delinquency rates climb. While VA borrowers generally benefit from no-down-payment loans and favorable interest rates, they are not immune to economic pressures.

Many military households face challenges like relocation, job transitions after service, or unexpected health expenses. When these issues overlap with rising housing costs, even VA borrowers may fall behind on their payments.

End of Special Forbearance Programs

Temporary COVID-era protections and VA-specific forbearance programs helped many borrowers stay current over the past few years. However, those programs have largely ended, leaving some veterans with fewer options.

At LBC Mortgage, we continue to advocate for our VA clients. We offer education, review current market options, and help borrowers apply for hardship relief if they qualify. When options are limited, we guide clients through the refinance process or offer solutions that can preserve homeownership.

Key Drivers Behind the Spike in Delinquencies

Inflation and Household Budgets

Persistent inflation is pushing basic living costs higher—from groceries and gas to medical care and utilities. At the same time, wage growth hasn’t kept pace. This financial squeeze is especially hard on FHA and VA borrowers, who often budget tightly each month.

In this environment, even small increases in expenses can lead to late or missed mortgage payments. LBC Mortgage understands these pressures. Our loan specialists take a detailed look at each borrower’s financial picture to recommend the most practical loan products or relief options.

Student Loan Repayment Burdens

Federal student loan payments resumed in mid-2025 after years of pauses. For many borrowers, this added another monthly expense at a time when their budgets were already stretched thin.

Roughly one in five mortgage holders also carries student loan debt. For this group, the added burden has pushed some into delinquency. We help our clients identify relief programs, prioritize debt repayment, and explore whether consolidating or refinancing could create a more manageable plan.

Negative Equity in Some Housing Markets

Another contributor to rising delinquencies is declining home values in certain regions. In states like Florida and parts of the South, rapid price appreciation during the housing boom has now reversed. As a result, some FHA borrowers now owe more on their homes than the property is worth.

Negative equity can create a sense of financial hopelessness, especially for new homeowners. At LBC Mortgage, we help clients understand their long-term options. We don’t just look at the numbers—we provide real solutions based on equity potential, local market conditions, and financial goals.

How LBC Mortgage Helps Borrowers Stay on Track

Customized Loan Support

We know that no two borrowers are the same. Our team reviews each client’s income, debt, home equity, and long-term plans. Whether you need a lower rate, a change in loan term, or a temporary hardship solution, we build a strategy that fits your life.

We specialize in FHA and VA loans and understand the unique challenges these borrowers face. Unlike big banks, we offer one-on-one support with fast answers and flexible loan products.

Refinance and Relief Options

Refinancing can be a smart way to avoid delinquency, especially if you’ve built equity or your financial situation has changed. We help FHA and VA borrowers refinance into more affordable loan terms or transition to conventional loans when eligible.

If refinancing isn’t possible, we work with borrowers to explore loan modifications, forbearance programs, or repayment plans. These tools can offer temporary relief and help avoid long-term damage to your credit.

Expert Guidance Every Step of the Way

At LBC Mortgage, we don’t just close loans—we build relationships. If you’re facing financial stress or worried about missing a payment, you don’t have to face it alone. We provide expert guidance, fast service, and compassionate support through every stage of your mortgage journey.

Let’s Solve It Together

Mortgage delinquency is a serious issue, but it doesn’t have to mean foreclosure. With the right support and strategy, you can stay in your home and protect your credit. At LBC Mortgage, we’re ready to help you take control.

Whether you’re struggling with an FHA or VA loan or simply want to explore better options, contact us today. Let’s find the best solution—together.