VA Loans in Texas: How Veterans Can Buy Their Dream Home

Texas, a state known for its vast landscapes, booming economy, and vibrant culture, is also a place where military service members and veterans can realize the dream of homeownership. VA loans in Texas are a powerful benefit, offering unique advantages that can make buying a home more accessible and affordable than conventional financing options. These government-backed loans provide significant financial flexibility for those who have served the nation.

From no down payment options to special state-specific programs, the resources available can help veterans navigate the competitive housing market across the Lone Star State.

Accessing VA loans in Texas begins with establishing eligibility and obtaining a Certificate of Eligibility (COE). The Department of Veterans Affairs (VA) sets minimum service requirements, which vary depending on your service period (wartime, peacetime, National Guard, or Reserves). For example, active-duty service members generally need 90 continuous days of service, and veterans who served during the Vietnam War era typically need at least 90 total days of service.

You can obtain your COE through a VA-approved lender, online via the VA's eBenefits portal, or by mail using VA Form 26-1880. Your lender can often help you retrieve this document quickly. The COE is a crucial piece of paper that verifies your eligibility to lenders, streamlining the loan application process and ensuring you meet the initial VA requirements for a home loan.

One of the most significant advantages of VA loans in Texas is the potential for eligible borrowers to secure 100% financing, meaning no down payment is required. This benefit removes a substantial financial barrier, often preventing many from buying a home. For example, if you are looking at a house in Dallas or Houston, eliminating the need for a 5% or 20% down payment can free up significant capital.

Additionally, unlike conventional mortgages, where a down payment of less than 20% typically requires private mortgage insurance (PMI), VA home loans do not require monthly mortgage insurance payments. This translates into lower monthly housing costs, potentially saving borrowers hundreds of dollars each month over the life of the loan. This dual benefit of no down payment and no PMI makes VA loans incredibly appealing.

VA loans often come with more competitive interest rates than conventional and FHA loans, mainly because the VA guarantees a portion of the loan to the lender. As of early July 2025, a typical VA purchase loan fixed interest rate might be around 6.000%, generally lower than conventional loan rates. This lower rate can result in significant savings over the lifetime of your mortgage.

While the VA does not set a minimum credit score requirement, most lenders who provide VA loans in Texas typically look for a FICO score of around 620. However, lenders are generally more lenient with credit score requirements for VA loans compared to conventional mortgages, understanding that military life circumstances can sometimes impact credit. They also assess your debt-to-income (DTI) ratio and residual income (money left over after major expenses) to ensure your ability to repay the loan.

While VA loans offer many benefits, most borrowers are required to pay a one-time VA funding fee. This fee helps offset the cost of the VA home loan program to taxpayers. The amount of the funding fee varies based on your loan type (purchase, refinance, cash-out), whether it is your first time using the VA loan benefit ("first use") or subsequent use, and the size of your down payment.

However, certain veterans are exempt from paying the VA funding fee. This includes veterans who receive VA compensation for service-connected disabilities, veterans who would receive disability compensation if they were not receiving retirement pay, active-duty service members who have been awarded the Purple Heart, and eligible surviving spouses. If you are a disabled veteran in Texas, you are likely exempt from this fee, offering even greater savings.

Texas offers unique benefits to veterans through the Texas Veterans Land Board (VLB). The VLB Veterans Housing Assistance Program (VHAP), established in 1983, helps eligible Texas veterans, military members, and their spouses purchase homes with low-interest loans. This program is available for single-family dwellings, condominiums, duplexes, triplexes, and four-plexes.

A unique feature of the VLB program is its ability to be used with federal VA benefits. While the VA loan covers the home purchase, the VLB also offers a Home Improvement Program (VHIP) for repairs and improvements to existing homes, and a Land Loan Program for purchasing 1-20 acres with a low down payment. Veterans can have one active loan in each program (land, home, home improvement) simultaneously, maximizing both state and federal benefits.

Properties financed with VA loans in Texas must meet specific Minimum Property Requirements (MPRs) set by the VA. These requirements ensure the home is safe, sanitary, structurally sound, and suitable for long-term living. An appraisal by a VA-assigned appraiser is mandatory to confirm the property meets these standards and to determine its market value.

MPRs include a sound roof, proper heating and cooling systems, adequate living space, and safe access to the property year-round via a public or private road. The property must be free of wood-destroying insects (a termite inspection is often required in Texas). While the VA is generally flexible, it will not approve loans for properties in designated Special Flood Hazard Areas (SFHAs) that require flood insurance, or those in Coastal Barrier Resources System (CBRS) areas, which protect inland properties from storm surges.

Looking to achieve your real estate goals in Texas? Convoy Home Loans is here to guide you every step of the way. Whether you're purchasing your first home, upgrading to a larger space, or investing in a second property, Convoy offers a variety of loan options tailored to your needs. From conventional loans to FHA, VA, and jumbo loans, their team provides competitive rates and expert guidance to ensure a smooth mortgage experience.

Ready to take the next step? Contact Convoy Home Loans today to explore your mortgage options and start your journey toward homeownership in Texas.