Texas VA Loan
Find who qualifies for the unique Houston VA Loan, and the pros and cons of a VA loan in Texas.
Veterans, active service members, and eligible spouses can apply for a Texas VA loan.
If you are looking for a home in Houston, you can purchase the perfect home for your family with a Houston VA loan.
VA loans are backed by Veterans Affairs and are designed to serve the men and women who served our country. If you are a member of the military, here’s what you can expect if you purchase a home with a VA loan in Texas.
VA Loans and How They Work
Texas VA home loans are provided by private lenders but backed by Veterans Affairs, enabling the lender to provide more favorable terms such as lower interest rates and no down payment.
The VA loan program was created in 1944 as part of the GI Bill. Eligible military members can apply for this home loan to ease their transition back into life after their military service.
This type of loan requires no down payment from the borrower. The government guarantees these loans.
VA loans are considered low-risk by lenders, so you can still get an excellent rate on your mortgage. Many institutions offer VA loans, so eligible borrowers aren’t limited in their choice of lenders.
Are You Eligible for a Texas VA Loan?
You may be eligible for a VA home loan if:
- You’re an active-duty service member or a veteran
- You’re a qualified spouse of a deceased service member or prisoner of war
In order to qualify for any home loan, you must also meet your lender’s credit and income requirements.
The Pros and Cons of Texas VA Loans
Pros:
No Down Payment Required
Texas VA loans are accessible for many veterans because eligible borrowers with full entitlement usually need no down payment.
No VA Loan Limit With Full Entitlement
Eligible borrowers with full entitlement do not face a VA loan limit, and the VA guarantees a portion of each loan. Your lender still sets the amount you can borrow based on your finances.
No Monthly Mortgage Insurance
Private mortgage insurance (PMI) can add to your monthly payment on other loans. VA loans do not require monthly mortgage insurance.
The VA does not set a minimum credit score, but lenders set their own credit requirements.
You Can Pay It Off Early
There is no prepayment penalty on a VA loan. If you pay off your first home or want to move, you may be able to use your VA benefit again.
Borrowers with past credit challenges may still be able to apply for a VA home loan. After a bankruptcy, a waiting period applies, often about two years depending on the circumstances and lender.
Cons:
Funding Fees
Although VA loans do not require private mortgage insurance, most borrowers pay a one-time VA funding fee. It can be paid at closing or financed into the loan, and some borrowers, such as those receiving VA disability compensation, are exempt.
Stricter Rules
You can’t use a VA loan to buy investment properties, and the home must meet VA appraisal and property requirements.
VA Loan Requirements
for 2026
To qualify for a VA loan, you must meet one of the following requirements.
You are an active member of the United States military.
You are an honorably discharged veteran with 90 days of wartime active service or 181 days of peacetime active service. Make sure you have the proper documentation.
You served over six years in the Selected Reserve or National Guard. Your deceased spouse was a service member who died while serving.
To apply for the loan, you will need to request a Certificate of Eligibility (COE) from the VA; your lender can often request it for you.
Texas VA Loan Limits
Eligible borrowers with full VA entitlement do not have a VA loan limit. The VA guarantees a portion of each VA loan, which helps lenders offer favorable terms.
The amount your lender will approve will depend on your income, credit, debts and other underwriting factors.
Texas VA Loan FAQs
Who is eligible for a VA loan in Texas?
VA loans are available to eligible veterans, active-duty service members, qualifying National Guard and Reserve members, and some surviving spouses who meet the VA's service requirements. Borrowers must also meet the lender's credit and income requirements.
Do VA loans require a down payment?
Eligible borrowers with full VA entitlement usually do not need a down payment. A down payment may be required in some situations, such as when entitlement is reduced by another active VA loan.
Do VA loans have mortgage insurance or a funding fee?
VA loans do not require monthly mortgage insurance. Instead, most borrowers pay a one-time VA funding fee, which can be paid at closing or financed into the loan; some borrowers are exempt, such as veterans receiving VA disability compensation for a service-connected disability.
What is a VA Certificate of Eligibility (COE)?
A Certificate of Eligibility is the VA document that confirms you meet the service requirements for a VA home loan. You request a COE from the VA, and your lender can often request it for you.
What VA refinance options are available in Texas?
The VA Interest Rate Reduction Refinance Loan (IRRRL, or streamline) is the main VA refinance option in Texas; it refinances an existing VA loan. Learn more in our guide to VA IRRRL vs. cash-out refinance in Texas, or see today's VA loan rates in Texas.
Can I do a VA cash-out refinance in Texas?
Generally, no. In Texas, any refinance that lets you take cash out of your homestead must follow the state's home-equity rules (Article XVI, Section 50(a)(6) of the Texas Constitution). Those rules don't allow the VA guaranty, so a VA cash-out refinance usually isn't an option on your primary home. If you have a VA loan, a VA IRRRL (streamline refinance) can lower your rate or payment. To tap your equity, a conventional Texas cash-out (50(a)(6)) loan lets you borrow up to 80% of your home's value. A loan officer can help you compare both.
Can I use a VA loan to buy an investment property?
No. VA purchase loans are for homes the borrower intends to occupy as a primary residence, not for investment-only properties.
Have a question about your situation? Get a custom quote or call 888-505-1718.
Are VA Loans Better Than Conventional Loans?
It depends on your situation. VA loans offer benefits such as no down payment for eligible borrowers with full entitlement and no monthly mortgage insurance, while conventional loans may suit borrowers with a larger down payment or who are not VA-eligible.
VA loans include a one-time funding fee unless you are exempt, and conventional loans typically require private mortgage insurance if you put less than 20% down.
Compare the total cost of each option, including the interest rate, fees and mortgage insurance, and choose the loan that best fits your goals.