TY - JOUR T1 - VA Loans Outperform FHA Loans—<em>Why? And What Can We Learn?</em> JF - The Journal of Fixed Income SP - 39 LP - 51 DO - 10.3905/jfi.2014.24.3.039 VL - 24 IS - 3 AU - Laurie S. Goodman AU - Ellen Seidman AU - Jun Zhu Y1 - 2014/12/31 UR - https://pm-research.com/content/24/3/39.abstract N2 - Veterans Administration (VA) loans have consistently performed better than Federal Housing Administration (FHA) loans. In this article, the authors take a closer look at both programs to identify why VA loans perform better. They conclude that the residual income test may be a critical differentiating factor and suggest that regulators evaluate whether the test might be a good supplement to the FHA’s current assessment of a borrower’s ability to pay.TOPICS: MBS and residential mortgage loans, legal/regulatory/public policy ER -