Veterans United: Bank of mom and dad propels next generation of homebuyers

About 60% of parents have provided or plan to provide financial help so their child can buy a home, according to survey results released Thursday by Veterans United Home Loans. This underscores how family wealth is increasingly shaping access to homeownership.

The poll of 400 veterans, active service members and civilians found that 59% of parents have already helped or intend to help with their child’s home purchase in the next three years. That support is even more common among veterans as 68% reported helping or planning to help, compared with 49% of civilians, according to Veterans United.

The findings reflect a housing market in which high prices, elevated mortgage rates and tight inventory are making it harder for many first-time buyers to qualify for financing or save for upfront costs without family assistance.

“For many families, helping a child buy a home has become less of an optional gesture and more of a practical response to today’s affordability challenges,” Chris Birk, vice president of mortgage insight at Veterans United, said in a statement.

“Parents want to give their children a stronger footing, whether that means helping them bridge upfront costs, qualify for financing or start building wealth through homeownership.”

Down payment help leads the list

Down payment assistance was the No. 1 reason for stepping in, cited by 43% of respondents. Another 37% said they want to help their child qualify for a mortgage, while 33% pointed to covering closing costs.

These responses point directly at two of the biggest barriers for first-time buyers: amassing enough cash upfront and meeting lender underwriting standards in an environment of higher rates and tighter budgets.

Parental motivations are not limited to the transaction itself. One-third said they want to help their child build equity and long-term wealth. Another 27% want to reduce their child’s monthly mortgage payment, and 25% said they aim to help their child afford a home in a better neighborhood or school district.

For mortgage lenders and real estate agents, this underscores the importance of clearly documenting gift funds, explaining down payment options and educating both generations on how parental support interacts with requirements for conventional and government loan programs.

How families are structuring support

Parents reported a mix of strategies for helping their children buy a home, with direct cash playing a central role:

• 33% have provided or plan to provide a specific down payment contribution
• 30% reported giving a separate cash gift
• 27% said they would help with closing costs
• 27% are allowing their child to live at home to save money before buying
• 25% are paying for initial furnishings or improvements
• 23% are covering moving expenses

In many cases, there is no expectation of repayment. Among parents who have helped or plan to help, 57% said the assistance is a gift. Another 20% said it is a loan and 23% described it as a combination of both.

That mix of support types has direct implications for underwriting. Lenders must verify whether funds are gifts or loans, determine if any private loans create additional debt obligations, and ensure co-signers meet program guidelines. Clear communication with all parties around documentation and sourcing of funds is critical to keeping transactions on track.

Big dollar amounts, bigger commitments

The financial commitments involved are often substantial, the survey found.

• 30% of parents said they have provided or expect to provide between $25,000 and $49,999
• 23% expect to contribute between $50,000 and $99,999
• 12% anticipate providing between $100,000 and $199,999
• Smaller shares reported plans to provide even larger sums

Parents are drawing from a variety of sources to fund that help:

• 65% said they are using checking or cash accounts
• 50% reported tapping investment accounts
• 35% reported the use of home equity through a HELOC, cash-out refinance or property sale
• 32% said they are using retirement accounts
• 27% pointed to inheritance or trust funds

About one in five parents (18%) said they have co-signed on a mortgage with their child or plan to do so. Another 17% said they have bought a home outright for their child or expect to, while 17% said they have made or will make a private loan directly to their child.

These structures can expand borrowing capacity but also introduce risk for older adults who may be nearing retirement. For housing professionals, this trend raises planning and compliance questions: how co-signing affects debt-to-income ratios, what happens if a child cannot make payments, and how intergenerational wealth transfers intersect with tax and estate planning.

“At the end of the day, this is about families working together to navigate a challenging market,” Birk said. “For parents who are in a position to help, it can be a powerful way to open the door to homeownership sooner and set their children up with a stronger financial foundation for the future.”

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.