How to Get a VA Loan in Texas

Texas VA Loan Volume and Why the State Is Unique

Texas has more active duty military personnel, veterans, and military retirees than any state except California. The combination of multiple major installations — Fort Cavazos (formerly Fort Hood), Joint Base San Antonio, Naval Air Station Corpus Christi, NAS JRB Fort Worth, Dyess AFB, Sheppard AFB, Goodfellow AFB, and Lackland AFB — plus the state’s massive veteran population produces consistently high VA loan origination volume. Texas generates approximately 8–9% of all VA purchase loans nationally each year despite representing about 9% of the U.S. population — roughly proportional, but the absolute numbers are large: approximately 50,000–60,000 VA purchase transactions per year in Texas.

The additional Texas-specific benefit: the Texas Veterans Land Board (VLB) program provides eligible Texas veterans a below-market rate subsidy of approximately 0.25–0.50% on top of the federal VA guarantee. This state benefit, stacked on VA’s existing advantages (no down payment, no PMI, no LLPAs, competitive base rates), produces the lowest effective mortgage rate available to homebuyers in Texas for eligible veterans.

Step 1: Confirm Eligibility and Obtain Your COE

VA home loan eligibility requires service meeting specific criteria. The key categories for most Texas veteran applicants:

Veterans: Discharge under other than dishonorable conditions, plus: 90 consecutive days active duty during a wartime period (WWII, Korea, Vietnam, Gulf War after August 2, 1990, or other designated periods), OR 181 continuous days during peacetime, OR any length if discharged for a service-connected disability. The DD-214 (Member Copy 4 preferred) documents your service. If your DD-214 is lost, request it from the National Archives at archives.gov/veterans/military-service-records — allow 4–6 weeks standard or use the expedited process.

Active duty: Currently serving — any length of continuous service qualifies. Your loan officer orders a Statement of Service from your personnel office confirming current active duty status.

National Guard and Reserve: Six years of selective reserve service OR 90+ days federal Title 10 activation since August 2, 1990. State emergency activations under Title 32 do not establish VA loan eligibility — the activation must be federal orders. Many Guard and Reserve members are surprised by this distinction; confirm your specific activation authority before assuming eligibility.

Obtain your Certificate of Eligibility (COE) one of three ways: (1) your lender requests it automatically through VA’s ACE system using your SSN — takes seconds if your records are complete in VA’s system; (2) apply online through VA’s eBenefits portal; (3) submit VA Form 26-1880 with DD-214 by mail. Most lenders handle COE requests as part of standard application processing — it’s rarely something you need to pursue independently.

Disability compensation exemption: Verify your funding fee exemption status before closing. Any veteran rated at any disability percentage (1%–100%) is permanently exempt from the VA funding fee on all VA loan transactions. This exemption should appear on your COE. If you have a pending disability claim at the time of closing, document it in your loan file — if the claim is subsequently approved, you’re entitled to a refund of the funding fee. Tell your loan officer about any pending claims before closing.

Step 2: Choose a VA-Approved Lender Who Specializes in VA

Every lender offering VA loans is technically “VA-approved,” but VA lending expertise varies enormously. VA underwriting has specific guidelines that differ from conventional — occupancy requirements for multi-unit properties, MPR evaluation, entitlement calculations for veterans with prior VA loans, IRRRL streamline refinance rules, and Texas-specific VLB participation. A lender who processes hundreds of VA loans per year navigates these without confusion; a lender who does occasional VA loans may mishandle entitlement calculations or create delays from unfamiliarity with VA-specific procedures.

Ask any lender you’re evaluating: “What percentage of your loan volume is VA purchase loans?” “Do you have an in-house VA underwriter or do you send to a wholesale lender?” “Are you a VLB participating lender for the Texas Vet rate benefit?” Herring Bank participates in the VLB program and handles VA purchase and refinance transactions in Texas with in-house processing. Texas veterans can access both the federal VA guarantee and the VLB rate subsidy through a single Herring Bank transaction.

Step 3: Understand VA’s Appraisal and Property Requirements

VA appraisals serve dual purpose: establishing market value and evaluating the property against VA Minimum Property Requirements. The VA appraiser is assigned through VA’s portal system — your lender orders it, VA assigns from the local approved appraiser panel. The appraiser evaluates:

Safety: No active structural hazards, safe electrical (no exposed wiring, functioning panels), no environmental hazards that would pose health risks to occupants.

Soundness: Roof with at least 2 years of estimated remaining life (a common MPR issue in Texas given hail damage to older roofs), functioning HVAC (critical in Texas summers — a non-functioning central A/C system is an MPR condition), foundation without active structural issues, intact windows and doors.

Sanitation: Functioning plumbing (working water heater, operational toilets and fixtures), no active wood-destroying insect evidence, adequate ventilation.

Texas-specific MPR issues: foundation movement from expansive clay soils is the most frequent MPR challenge in DFW, Austin, and Houston markets. Active foundation movement or deferred maintenance raising structural concerns will be flagged. Work with an agent experienced in VA transactions in your target neighborhoods who can identify properties with likely MPR exposure before you write offers — rather than discovering a condition issue mid-transaction after inspection and appraisal costs are spent.

Step 4: Making VA Offers Competitive in Texas Markets

VA offers have historically faced resistance from some Texas sellers who believe VA appraisals are more likely to come in below contract price, or that VA MPR conditions create repair obligations. This perception is partly outdated — VA appraisals follow the same comparable-sales methodology as conventional appraisals and don’t systematically produce lower values. But seller reluctance is real in some markets and requires a strategic response.

Tactics to make VA offers more competitive: provide a strong pre-approval letter specifically from a VA lender (not a generic letter that happens to mention VA), include your Certificate of Eligibility with the offer (demonstrates you’ve done the qualifying work), offer a shorter inspection period (7 days rather than 10), and consider writing a brief note to the seller about your military service context. Some real estate agents recommend including a “VA addendum” explaining VA’s process and timelines — reducing seller uncertainty about the program.

On seller concessions: VA allows the seller to pay all normal buyer closing costs plus up to 4% of the loan amount in additional concessions. On a $400,000 loan, that’s $16,000 in potential seller contribution. In balanced markets, requesting seller-paid closing costs is reasonable and accepted. In competitive multiple-offer markets, concession requests reduce your effective offer price — weigh them strategically against your offer’s overall competitiveness.

Step 5: The Texas Vet Loan — How to Access the Rate Subsidy

The VLB Texas Vet Loan rate subsidy requires using a VLB-participating lender. The process is: apply for both the federal VA loan and the VLB rate subsidy simultaneously through your VLB-participating lender. The lender underwrites to VA standards, obtains VA’s guarantee, and also registers the loan through VLB to access the subsidized rate. One application, one closing, both benefits applied. VLB verifies your Texas residency, service eligibility, and that you haven’t previously received VLB benefits that might affect eligibility for the rate program.

Current VLB rate information is available at vlb.texas.gov. VLB rates change periodically based on bond market conditions — check the current rate at the time of your application rather than relying on any static estimate. For veterans with 30%+ service-connected disability, VLB provides an additional rate reduction below the standard Texas Vet rate. Confirm with your lender whether the additional disability discount applies to your situation.