VA Home Loans in Texas – Everything You Need to Know

Buying a home is an exciting milestone in life. But it can also be daunting especially when it comes to securing financing. This is where VA home loans come in. VA home loans offer significant benefits to eligible veterans active duty military, reservists, and surviving spouses. If you’re looking to buy a home in Texas, VA loans should definitely be on your radar.

In this comprehensive guide, we’ll walk through everything you need to know about VA home loans in Texas

What Are VA Home Loans?

VA home loans are mortgage loans guaranteed by the U.S. Department of Veterans Affairs. Instead of requiring a down payment and private mortgage insurance (PMI), VA loans allow eligible borrowers to get into a new home without these extra costs.

The VA home loan program was established in 1944 as part of the original GI Bill. The goal was to help service members returning from WWII purchase homes. Today the program continues to help active duty military, veterans, reservists and surviving spouses achieve homeownership.

Nationwide, over 2 million VA home loans have been issued, with a total loan amount over $400 billion. In Texas specifically, the Texas Veterans Land Board (VLB) and private lenders have helped tens of thousands of veterans become homeowners through VA financing.

VA Home Loan Benefits

VA home loans offer significant advantages compared to conventional mortgages. Here are some of the top benefits:

• No Down Payment Required: VA loans do not require any down payment in most cases. This removes one of the biggest barriers to homeownership.

• No Private Mortgage Insurance (PMI) Required: PMI protects the lender, not you. But with a VA loan, you don’t have to pay this added monthly cost.

• Competitive Interest Rates: Interest rates on VA loans are very competitive with conventional loans. This keeps your monthly payments low.

• Limits on Closing Costs: VA loans limit the fees lenders can charge. This reduces out-of-pocket costs at closing.

• Can Be Used Multiple Times: You can use your VA home loan eligibility again in the future after paying off your initial VA loan.

• Easier to Qualify: VA loans have more flexible credit score and debt-to-income requirements than many loan programs. This makes it easier to get approved.

• Options If You Fall Behind: The VA offers foreclosure avoidance options to help if you fall behind on payments later on.

Together, these features make VA loans one of the best home financing options out there. The program has helped millions of service members, veterans and their families achieve the dream of homeownership.

Am I Eligible for a VA Home Loan in Texas?

To qualify for a VA home loan, you must meet the VA’s minimum service requirements. In general, eligibility includes:

• Active duty military who have served at least 90 continuous days
• Veterans with at least 90 total days of active duty service
• Reservists and National Guard members with at least 90 days of active service
• Surviving spouses of veterans who died in service or from a service-connected disability

In addition to meeting the service requirements, you’ll also need to meet general mortgage loan qualifications:

• Good credit history
• Stable income
• Manageable debts

VA loans are available for primary residences. This includes single-family homes, townhomes, and condos. VA loans can also be used to build a new home.

Importantly, you can use your VA loan benefit again and again. Your eligibility doesn’t expire after purchasing one home.

How Do I Apply for a VA Home Loan in Texas?

The application process for VA loans in Texas is straightforward:

1. Get Pre-Approved

Work with a lender to get pre-approved. This involves submitting documents to confirm your eligibility and finances.

2. Obtain Your COE

Your lender will request a Certificate of Eligibility (COE) from the VA on your behalf. This confirms you qualify based on your service history.

3. Find a Home

With pre-approval and COE in hand, you can confidently start shopping for homes. Focus on properties that fit your budget and needs.

4. Make an Offer

Once you find the perfect place, make an offer! Remember, you already have your financing lined up with the VA loan pre-approval.

5. Close on Your Home

The final step is completing the closing process. This involves signing all the final paperwork to make the home officially yours!

Throughout the process, rely on your lender and real estate agent for guidance. Their expertise will help you secure the best deal on your new home.

VA Loan Limits in Texas

The VA sets maximum conforming loan limits based on the cost of real estate in each area. In Texas, the 2023 baseline VA loan limit is $647,200.

However, many counties have higher limits based on local real estate values:

• Austin metro area – $803,000
• Dallas metro area – $803,000
• Houston metro area – $803,000
• San Antonio metro area – $803,000

So in major Texas metros, you may qualify for VA financing up to $803,000. VA loans go up to 125% of median home prices in each location.

Interest Rates on VA Loans in Texas

Interest rates on VA loans are determined based on current market rates. VA mortgages offer very competitive interest rates compared to conventional loans.

Here are sample VA loan rates in Texas as of February 2023:

• 30-year fixed: 5.5%
• 15-year fixed: 4.75%
• 5/1 ARM: 4.125%

VA interest rates are similar to rates for conforming conventional loans. This gives veterans and military buyers excellent financing terms for purchasing a home.

Working with Texas Veterans Land Board

The Texas Veterans Land Board (VLB) oversees VA loans in Texas. VLB has been helping Texas veterans buy homes since 1983 through the Veterans Housing Assistance Program.

Over 78,000 Texas veterans have purchased a home through VLB’s VA mortgage program.

VLB offers competitive interest rates and expanded eligibility to National Guard members. You can use VLB financing to buy a primary residence up to $766,550.

To learn more and apply, check out the VLB VA loan page. Their site has full details on eligibility, interest rates, and the application process.

Finding a VA-Approved Lender

While VLB is a top option, you can use any VA-approved lender for your mortgage. Shop around with different banks and lenders to find the best deal.

Your lender will handle your VA loan application and closing. Be sure to work with an approved VA lender familiar with the program’s guidelines and benefits.

Use the VA lender search tool to find accredited lenders in your area. Look for an experienced lender that can walk you through the VA loan process from start to finish.

Buying a Home the Smart Way with a VA Loan

Purchasing a home is a big step. But with a VA mortgage, you can buy with confidence. VA loans help eligible borrowers get financing with no down payment required and lower closing costs.

Whether you want to live near a major Texas city or prefer a rural retreat, VA loans can make owning your own home more affordable. If you served our country, let the VA home loan program serve you in return.