VA Mortgage

VA Mortgage Topics Covered

What is a VA Mortgage?

VA home loans are guaranteed by the U.S. Department of Veterans Affairs and were established in 1944 to support veterans, active-duty service members, and their families in buying or refinancing a home. Since then, over 24 million VA loans have helped military families achieve homeownership.

Because these loans are backed by a government agency, lenders face less risk, making VA loans more accessible. Eligible borrowers in Texas can often secure a VA loan with no down payment and more flexible credit requirements.

The primary goal of the VA home loan program is to provide veterans with affordable financing and the opportunity to purchase a home without a down payment, through qualified Texas lenders.

How to Qualify for a VA Mortgage?

To qualify for a VA home loan in Texas, you must meet certain service and lender requirements:

- Serve at least 90 consecutive days of active duty during wartime, or at least 181 consecutive days during peacetime.

- Complete more than six years of service in the National Guard or Selective Reserve.

- Be the surviving spouse of a service member who died on active duty or from a service-connected disability and have not remarried, or remarried after age 57 or December 16, 2003. - Spouses of prisoners of war or service members missing in action may also qualify.

- Meet the credit and income requirements set by your Texas lender. While the VA does not require a minimum credit score, lenders typically look for a FICO score of at least 620. Your income and existing debt will also be evaluated to ensure you can afford the mortgage.

- Purchase a Texas property that meets VA safety standards and building codes, and use it as your primary residence.

- Obtain a VA Certificate of Eligibility (COE), which is required to secure the loan.

These guidelines help ensure that VA loans support qualified veterans, service members, and their families in achieving homeownership.

Types of VA Mortgages

VA Loan Options in Texas

VA Cash-Out Refinance: Replaces your current mortgage with a new loan while allowing you to access a portion of your home’s equity. Funds can be used to pay off debt, make home improvements, or convert a non-VA loan into a VA loan.

VA IRRRL (Interest Rate Reduction Refinance Loan): Also known as a streamline refinance, this option lets you replace an existing VA loan with one that has a lower interest rate or switch from an adjustable-rate to a fixed-rate mortgage.

VA Renovation Loans: Enable Texas borrowers to buy or refinance a home while rolling the cost of improvements directly into the mortgage.

VA Supplemental Loans for Home Improvements: Can be added to an existing VA mortgage or included as part of a VA refinance to fund home improvements.

These programs provide flexible options for eligible veterans and service members to manage, improve, or refinance their homes.

Benefits of a VA Mortgage

Benefits of VA Home Loans in Texas

- Buy a home with no down payment.

- No maximum loan limit—borrow as much as you need.

- No Private Mortgage Insurance (PMI) since VA loans are government-backed.

- Reduced closing costs: The VA limits lender origination fees to 1% of the loan amount and restricts other fees.

- No minimum credit score requirement.

- Lower mortgage rates compared to FHA and conventional loans.

- VA assistance for borrowers struggling with payments: Loan technicians can negotiate with lenders to help avoid foreclosure.

- No prepayment penalties—pay off your loan early without fines.

- Repeatable benefit: You don’t need to be a first-time homebuyer and can use the VA loan benefit multiple times.

- Bankruptcy or foreclosure won’t permanently disqualify you; you may still be eligible two years after the event.

These features make VA loans a powerful option for veterans, active-duty service members, and their families to achieve and maintain homeownership.

Disadvantages of a VA Mortgage

VA Loan Considerations

VA loans require a funding fee, typically between 1.25% and 3.3% of the loan amount. This fee is usually rolled into the loan, which may slightly increase your monthly payment and the total interest over the life of the loan.

VA loans can only be used to purchase or build a primary residence, or to refinance an existing mortgage. They cannot be used for investment properties or vacation homes.

Frequently Asked Questions

Can I use my VA loan benefit more than once?
Yes. Your VA loan eligibility is reusable depending on your situation. Typically, if you have paid off a previous VA loan and sold the property, your eligibility can be restored for another loan. In some cases, even if you still own the property but have paid off your VA loan in full, you may have your eligibility restored on a one-time basis.

Can the children of a veteran use the VA home loan benefit?
No. The VA home loan benefit is only available to eligible veterans, service members, and certain surviving spouses—not their children.

What repayment options are available?
VA loans offer several repayment options:

Traditional fixed-rate mortgage with consistent principal and interest payments

Graduated Payment Mortgage (GPM), which starts with lower payments that gradually rise

Growing Equity Mortgage (GEM), where payments gradually increase with all additional funds applied to principal for faster payoff
There is no prepayment penalty.

What is the maximum VA loan in Texas?
While VA loans do not have a set maximum, lenders generally cap them at $417,000, though the actual limit depends on the home’s reasonable value or purchase price.

Other VA loan uses:
VA financing can be used to purchase or construct a home, perform a cash-out refinance, or utilize programs like the Native American Direct Loan. Adapted housing grants can also be combined with VA loan benefits.

The VA loan program is designed to help those who have served our country achieve the dream of homeownership with flexible, veteran-friendly financing options.

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Notice To Texas Loan Applicants: Consumers wishing to file a complaint against a mortgage banker, or a licensed mortgage banker residential mortgage loan originator, should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, TX 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov

A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov