See if you qualify, free, 60-second check.
A VA loan is a government-backed mortgage where the VA guarantees a portion of the loan, not lends the money directly. Private lenders, banks, credit unions, and mortgage companies, extend the credit. Because the VA stands behind part of the loan if you default, lenders can offer terms that aren't possible on conventional financing: no down payment, no private mortgage insurance, and rates that typically run near or below conventional. Here's how the whole thing actually works, from your Certificate of Eligibility to closing day in Texas.
The VA guarantees up to 25% of the loan amount on most purchases. That slice of coverage is why a lender will accept zero down without charging PMI. The risk that normally justifies those requirements is transferred to the VA instead.
The guaranty isn't insurance you pay for month to month. It's a promise the VA makes to the lender, funded by the VA funding fee that borrowers pay at closing. Eligible veterans with a service-connected disability rating of 10% or higher pay zero funding fee. Everyone else pays once, and the guaranty covers them for the life of the loan.
You don't apply to the VA for a loan. You apply to a VA-approved lender, which in Texas is most mortgage companies and many banks. The VA sets the program rules. The lender sets the rate and decides whether to approve your file.
Service requirements are the starting point. Most veterans qualify if they served 90 consecutive days on active duty during wartime, 181 days on active duty during peacetime, or 6 years in the National Guard or Reserves with an honorable discharge. Surviving spouses of service members who died in the line of duty or from a service-connected disability may also qualify. The VA's website has a full eligibility matrix for edge cases (military academy graduates, discharged for hardship, etc.).
Texas veterans get an extra layer. The Texas Veterans Land Board runs a separate interest rate program that layers on top of the VA loan and offers a discounted rate below what the VA loan already gets you. Same closing process, same VA rules, just a lower rate. See the full breakdown of Texas Vet loan eligibility requirements to see if you qualify for both programs.
Credit score: the VA sets no minimum, but lenders do. Most Texas VA lenders want at least a 620 FICO. Some premium lenders require 640 or 660. A lower score doesn't mean automatic denial, but it raises your rate and limits your lender choices. Read about credit scores for Texas Vet loans if you're close to a threshold and wondering whether to wait.
The COE is the document that tells your lender two things: (1) you've met the service requirements, and (2) how much VA entitlement you have available. Lenders need it before closing.
Three ways to get it. Your lender can pull it electronically through the VA portal, which usually takes a few minutes. You can request it yourself at va.gov. Or you can mail VA Form 26-1880, which takes several weeks. Most borrowers let their lender handle it on day one of the application.
Entitlement is the part that trips people up. The COE shows a basic entitlement of $36,000, which is a number left over from 1944. What actually matters is your bonus entitlement. Since 2020, veterans with full entitlement (no active VA loans, or prior loans fully paid off and entitlement restored) have no loan limit on VA purchases. You can buy a $900,000 home with zero down if the lender approves it. If you have an existing VA loan you haven't paid off, you have partial entitlement remaining. The lender calculates what's available and whether you'd need a down payment to cover the gap.
The occupancy requirement is firm: the property has to be your primary residence. You can't use a VA loan to buy an investment property or a vacation home. That said, you can buy a property with up to four units, occupy one unit, and rent the others. The rental income from the other units can sometimes offset the mortgage payment in underwriting, though guidelines vary by lender.
Residual income is a VA-specific check that runs alongside DTI. After all monthly debt payments and estimated living expenses are subtracted from your gross income, the remaining amount has to meet a minimum that varies by family size and region. Texas falls in the South region. A family of four typically needs around $1,003 in residual income, though that number adjusts with the VA's guidelines. It's a backstop that prevents approvals where the borrower technically passes DTI but has almost nothing left over each month.
The VA appraisal is mandatory. The VA assigns the appraiser from a rotation list. You can't shop for one, and neither can your lender. The appraiser values the property and checks it against VA Minimum Property Requirements (MPRs): the home has to be safe, sanitary, and structurally sound. Peeling paint, exposed wiring, a leaking roof, or non-functioning plumbing can all trigger repair conditions before the loan closes.
If the appraised value comes in below the purchase price, you have options. You can negotiate the price down to the appraised value. You can pay the difference out of pocket (not rolled into the loan). You can ask the seller to repair the MPR issues if that's what caused the problem. Or you can walk away using the VA appraisal contingency in your contract. What you can't do is waive the appraisal on a VA loan.
No PMI, but there is a one-time funding fee. It's a percentage of the loan amount, paid at closing or rolled into the loan. It funds the VA guaranty program so it stays self-sustaining without taxpayer dollars.
The chart covers regular military on a first VA loan. Reservists and National Guard members pay slightly higher fees on first use (2.4% with 0% down). Veterans with a service-connected disability of 10% or higher: zero fee. Surviving spouses of veterans who died in service or from service-connected disability: zero fee. Confirm your exemption status before closing. The fee shows up on your Loan Estimate, and your lender should flag any exemption automatically if you disclose your disability rating during application.
Putting 10% down drops the fee to 1.25%. Whether that's worth deploying the cash depends on the math: compare the invested return on that cash against the interest cost of the rolled-in fee at your rate. Most borrowers find zero down and a slightly higher loan balance works better, but run it with your lender on actual numbers.
No down payment, for first-time users with full entitlement. No private mortgage insurance, at any loan-to-value, ever. No prepayment penalty. No maximum loan amount (since 2020 for full entitlement borrowers). The lender can charge at most 1% origination fee. Seller concessions are allowed up to 4% of the purchase price on top of normal closing costs, which is more generous than conventional programs. And veterans can request a VA Escape Clause, letting them walk away if the appraisal comes in below the sale price without losing their earnest money.
These aren't competing programs. They stack. Eligible Texas veterans apply through a VLB-approved lender and get the VA loan with a VLB interest rate discount on top. The VLB sets a rate weekly that's typically below even the VA-standard rate. The loan is still a VA loan with VA rules. The VLB program just provides a rate subsidy. The VLB loan limit is currently $832,750. Purchases above that limit don't qualify for the rate discount, though the VA loan itself still works above the limit with full entitlement.
See the full comparison in Texas Vet loan vs VA loan, including who's eligible for each, how the rates differ, and what the VLB program costs in fees. Current VLB rates post weekly at the Texas rate tracker.
Two paths. The VA IRRRL (Interest Rate Reduction Refinance Loan) lets you refinance an existing VA loan to a lower rate with minimal documentation and usually no appraisal. It's the fastest, cheapest refi option in the VA toolkit. The VA cash-out refinance lets you pull equity from a home you own, even if the original mortgage wasn't a VA loan. That one requires full underwriting. Read the guide on VA IRRRL streamline refinance in Texas for current requirements and what to expect.
Waiting too long to get the COE. Assuming the VA appraisal is just like a conventional appraisal (MPR repairs can add two to three weeks). Not disclosing a disability rating, which can mean you pay a funding fee you were exempt from. Buying a property that won't pass MPRs: fixer-uppers that need structural or systems work often fail VA appraisal on the first pass. And not comparing lenders. VA loan rates vary lender to lender. A half-point rate difference on a $400,000 loan is roughly $130 a month and over $46,000 over 30 years.
This site connects Texas veterans with licensed VA and Texas Vet lenders. We're not a lender, and nothing here is a commitment to lend or an affiliation with the VA, VLB, or any government entity. The 60-second eligibility check pulls no credit and takes about a minute. It lets a licensed professional review your service history, entitlement, and financial picture, and tell you whether a VA loan or the combined Texas Vet program is your best path.
See what you qualify for in 60 seconds, free and no credit check. Use the eligibility check at the top of this page.
No, for first-time users with full entitlement. The VA guaranty covers the lender's risk in place of a down payment and PMI. If you have remaining entitlement from a prior VA loan you still carry, you may need a down payment to cover the gap between your remaining entitlement and 25% of the purchase price.
Typically 30 to 45 days from application, which is similar to conventional. The VA appraisal adds time if MPR repairs are required. Government shutdown periods or high-volume VA cycles can stretch appraisal turnaround. Getting your COE early and having documents ready on day one keeps the timeline tight.
Yes. VA loan entitlement is reusable. Once you pay off a VA loan and sell the property, your full entitlement is restored. You can also have two VA loans at once if you have remaining entitlement after the first loan. The COE will show exactly how much entitlement is available.
No income maximum. The VA doesn't cap how much you earn. Lenders do have debt-to-income limits, typically 41% DTI as a soft ceiling, though some lenders approve higher with compensating factors like high residual income or significant reserves.
Veterans with a service-connected disability rating of 10% or higher pay zero funding fee, even on a subsequent VA loan. Surviving spouses of veterans who died in service or from a service-connected disability also pay zero. Disclose your disability rating to your lender at application so they apply the exemption on your Loan Estimate.
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