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A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs that lets eligible veterans, active-duty service members, and qualifying surviving spouses buy a home with no down payment and no private mortgage insurance. The VA doesn't lend money directly. It guarantees a portion of the loan, which gives lenders the confidence to offer better terms than most conventional programs.
That guarantee is the engine. Because the VA promises to cover a loss if you default, lenders can skip the down payment requirement they'd normally need to protect themselves. You still need good credit and steady income, but you're not required to save up 3.5% to 20% before you can buy.
The VA backs 25% of the loan up to the county conforming limit. For 2025, that's $806,500 in most Texas counties, though some high-cost areas go higher. This percentage is called your "entitlement."
Basic entitlement is $36,000, which gets supplemented by bonus entitlement to reach that 25% figure on larger loans. If you've never used a VA loan before, you have full entitlement, meaning no loan limit for qualifying borrowers and no down payment required regardless of purchase price. If you had a prior VA loan you didn't fully pay off or weren't discharged from, a lender will calculate your remaining entitlement to determine how much you can borrow without a down payment.
Texas also has its own veteran lending program through the Texas Veterans Land Board (VLB). The VLB offers a below-market interest rate on top of a VA-backed purchase. The two programs work together, and the VLB loan limit in 2025 is $832,750. Read the comparison at Texas Vet Loan vs VA Loan if you're deciding which path fits better.
VA loans don't charge monthly PMI, but they do charge a one-time funding fee at closing. The fee covers the program's administrative costs and helps keep it self-sustaining without taxpayer subsidies. The amount depends on your down payment and whether you've used the benefit before.
A few things worth knowing. Disabled veterans with a VA disability rating receive a full waiver on the funding fee. Surviving spouses who receive Dependency and Indemnity Compensation (DIC) also qualify for the waiver. If you put 5% or more down, you get a lower fee, which can offset some of the opportunity cost of a larger down payment.
On a $400,000 loan, the first-use fee at 0% down is $8,600. That's real money. Some borrowers roll it into the loan to preserve cash at closing. Others pay it upfront. Either way, it's a one-time cost versus the ongoing PMI that a conventional loan with less than 20% down requires every single month.
This is the part that makes VA loans genuinely competitive even when the rate isn't always the lowest. On a conventional loan at less than 20% down, you're paying PMI until you reach 20% equity. That runs $100 to $200 a month on a $400,000 loan. It takes years to hit that threshold. The VA loan skips PMI entirely, and that savings compounds over time.
The trade: VA loans are for primary residences only. You can't use the benefit on a vacation home or investment property. You also need to certify you'll move in within 60 days of closing. If that constraint fits, the no-PMI structure is hard to beat.
Service requirements, not income, determine VA eligibility. The basic thresholds:
If you're not sure you qualify, request your COE. The VA's online system often resolves eligibility automatically from military records. A lender can pull it for you. See full requirements at Texas Vet loan eligibility requirements.
The VA itself doesn't set a minimum credit score. Lenders do. Most Texas VA lenders set a floor at 620. Some go to 580 with compensating factors; a few require 640 for VA jumbo loans.
The VA guideline for debt-to-income ratio is 41%. That's not a hard cutoff. The VA uses a residual income test alongside DTI. Residual income is what's left each month after all debts, housing costs, and taxes. A veteran with a DTI of 48% but strong residual income can still close. The system is designed to reflect real ability to pay, not just hit a single ratio.
Income documentation follows standard rules: W-2s, pay stubs, tax returns. Self-employed veterans typically need two years of tax returns and may face stricter income averaging. If that's you, check out bank-statement loan options as a complement or alternative for investment properties.
The VA sends its own appraiser to confirm the home is worth the purchase price and meets safety and livability standards called Minimum Property Requirements. MPRs aren't as strict as people think. The property needs to have working utilities, a safe roof, no major structural defects, and no lead paint hazards. It's not a renovation program, so cosmetic issues aren't a blocker.
The appraisal can sometimes come in lower than the agreed purchase price. If that happens, you have options: negotiate the price down to appraised value, pay the difference in cash, or walk with your earnest money. The seller can't demand you proceed above appraisal without your written consent.
VA condos need to be on the VA-approved condo list. Existing condos are often already approved. If the one you want isn't, a VA Condo Review can get it added. See the guide at VA-approved condos in Texas.
One thing to know: VA appraisals sometimes take longer than conventional appraisals because VA-assigned appraisers handle a separate queue. In competitive markets, some sellers see this as a delay risk. Having a lender with a strong VA track record helps. They'll know which appraisers are fastest in your county and can flag any MPR issues before the seller commits.
The VA benefit doesn't expire and doesn't limit you to one loan. If you've paid off a prior VA loan and sold the property, your entitlement restores fully. You can also have two VA loans at once if your remaining entitlement covers the second purchase and you're moving to a new primary residence (a PCS, for example).
If you already own a home with a VA loan and want to refinance, the VA IRRRL (Interest Rate Reduction Refinance Loan) is a streamlined option. No appraisal, minimal paperwork, just a rate reduction. See the Texas specifics at VA IRRRL streamline refinance in Texas.
VA loan rates track conventional rates but typically price 0.25% to 0.50% below them because of the VA guarantee. The spread changes. The live weekly rate for Texas VA borrowers is on the Texas rate tracker. Check it before you start shopping lenders so you know what a competitive offer looks like.
When you're ready to see whether the benefit applies to your situation, the free 60-second eligibility check starts the conversation without a credit pull. Texan veterans also building or renovating should look at the VA construction loan guide, and first-timers curious about the VLB bonus rate should read how the Texas Vet Program works.
This site connects Texas veterans with licensed mortgage professionals. It's not a lender and not a commitment to lend. It's not affiliated with the VA, the VLB, or any government agency.
See what you qualify for in 60 seconds, free and no credit check. Use the eligibility check at the top of this page.
No. Eligible veterans with full entitlement can finance 100% of the purchase price. The one-time VA funding fee still applies at closing but can be rolled into the loan.
The funding fee is a one-time charge, typically 1.25%-2.15% on a first-use purchase depending on down payment. Veterans with a VA disability rating and qualifying surviving spouses have the fee fully waived.
The VA loan is the federal program; the Texas Vet Loan is a state subsidy through the Texas Veterans Land Board that layers a below-market rate on top. You can often use both together on the same purchase. See the full comparison at /guides/texas-vet-loan-vs-va-loan/.
The VA itself has no credit minimum, but most Texas lenders set a 620 floor. A few lenders work down to 580 with compensating factors like reserves or a low debt load. Ask any lender you speak with what their VA minimum is.
No. VA loans are for primary residences. You must occupy the home within 60 days of closing. If you're buying investment properties, look at DSCR loans, which qualify on the property's rent rather than your income.
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