VA Loans in Texas

Texas is home to more veterans than almost any state in the country — and Central Texas, with Fort Hood an hour up I-35 and Camp Mabry right here in Austin, has one of the densest veteran communities anywhere. Yet I still meet veterans every month who are saving for a 20% down payment they will never need, or paying mortgage insurance the government already agreed to waive for them.

If you served, you earned a home loan benefit that is flat-out better than what the rest of us get. Here’s exactly what a VA loan is, what it’s worth in real dollars, and how to use it in Texas — where the state stacks a few extra benefits on top.

What a VA loan actually is

A VA loan isn’t a loan from the government. The Department of Veterans Affairs guarantees a portion of the loan, and a private lender funds it. That guarantee is why lenders can offer terms nobody else gets: the VA is standing behind you.

Because it’s still a regular mortgage funded by a lender, the lender you choose matters — a lot. Two veterans with identical files can get meaningfully different rates depending on who’s quoting. That’s exactly why I shop 40+ wholesale lenders instead of showing you one bank’s rate sheet.

The benefits, in real dollars

• $0 down payment. On a mid-$400s Austin-area home, a conventional buyer putting 5% down needs roughly $22,000 before closing costs. A qualified VA buyer with full entitlement needs $0 down. That’s not a typo — that’s the benefit.
• No monthly mortgage insurance. FHA buyers pay mortgage insurance every month, usually for the life of the loan. VA buyers pay none. On that same mid-$400s home, that’s commonly $200–$300 a month staying in your pocket — call it 80 breakfast tacos, every month, forever.
• Competitive rates. VA rates typically run at or below comparable conventional rates, because of that government guarantee.
• No loan limit with full entitlement. Since 2020, veterans with full entitlement have no VA-imposed loan cap. The loan size is limited by what you qualify for, not by a table.
• Seller can pay your costs. VA rules allow sellers to cover your closing costs, plus concessions up to 4% of the price for things like paying off debt or the funding fee. In today’s balanced Austin market, that’s very negotiable.
• No prepayment penalty, and the loan is assumable — a qualified buyer can take over your rate when you sell. Ask anyone with a low-rate mortgage what that’s worth right now.
• My lender fee: zero. Same as every loan I do. Not “reduced for veterans.” Zero.

The one real cost: the VA funding fee

The trade-off for no down payment and no mortgage insurance is a one-time funding fee, which can be rolled into the loan. For 2026:

• First use, less than 5% down: 2.15% of the loan amount
• First use, 5–9.99% down: 1.50%
• First use, 10% or more down: 1.25%
• Subsequent use, less than 5% down: 3.30% (drops to the same 1.50%/1.25% tiers with a down payment)

Here’s the part too many veterans don’t know: if you receive VA disability compensation for a service-connected condition, you are exempt from the funding fee entirely. So are Purple Heart recipients on active duty and certain eligible surviving spouses. On a $400,000 loan, that exemption is worth $8,600. I check for it on every single VA file, because the number of exempt veterans who were charged the fee anyway is not zero.

Who qualifies

• Service: generally 90+ days of active duty during wartime, 181+ days during peacetime, 6+ years in the Guard or Reserves (or a qualifying activation), or you’re an eligible surviving spouse.
• Certificate of Eligibility (COE): the document that proves it. You don’t need to chase this yourself — I can usually pull it electronically in minutes.
• Credit and income: the VA itself sets no minimum credit score; lenders set their own requirements, commonly around 620 — and with 40+ lenders, I have options for files that one bank would decline.
• Occupancy: the home needs to be your primary residence. No vacation condos on this benefit.

Texas stacks extra benefits on top

This is where being a Texas veteran gets even better:

• Property tax exemptions. Veterans with a 100% service-connected disability rating (or individual unemployability) pay zero property tax on their homestead in Texas. Partial ratings from 10–90% earn exemptions of $5,000–$12,000 of assessed value. In a state where property taxes are the big line item, this is enormous — for a 100% rated veteran on an average Austin home, it can mean $8,000+ a year that never leaves your account.
• The Texas Vet Loan (VLB). The Texas Veterans Land Board runs a separate state program with below-market fixed rates that can be combined with your federal VA benefit, on loans up to $832,750. Veterans with a 30%+ disability rating get an additional half-percent rate discount. Whether VLB beats the best of my 40+ lenders varies week to week — which is exactly why we price both.

How to apply (it’s simpler than you think)

• Step 1: Call or text me. We talk about your service, your goals, and your numbers. About 10 minutes.
• Step 2: I pull your COE and get you pre-approved — usually same day.
• Step 3: You shop with a real budget. Your agent submits offers backed by a solid pre-approval letter.
• Step 4: Under contract, the VA appraisal is ordered and I manage the file to closing. VA loans close in roughly the same 30-or-so days as everything else — the “VA loans are slow” thing is a myth that mostly gets spread by people who don’t do many of them.

Two myths worth killing

“Sellers won’t take VA offers.” A VA offer with a strong pre-approval from a local broker who answers the phone is a strong offer, period. When a listing agent has questions, I call them myself. Problem solved.

“I already used my benefit.” Entitlement is reusable and restorable. Sold the house and paid off the loan? Your full benefit is typically back. Even if you still own a home with a VA loan on it, you may have remaining entitlement for another purchase. This is a five-minute check — don’t assume, ask.

The bottom line

You earned this benefit the hard way. Using it well — the right lender out of 40+, the funding fee exemption checked, the Texas property tax exemption filed, VLB priced against the field — is the difference between a good deal and the deal you actually earned.

Don’t be mad at money. Shop your rate.

Ready to see your numbers? It takes about 10 minutes, it’s free, and there’s no obligation. Call or text me at (512) 423-4663, or get started here.

Russell Stout | Texas Mortgage Consultants, PLLC | NMLS #220896 | Company NMLS #1843758 | Equal Housing Lender. Texas Mortgage Consultants is a private company not affiliated with or endorsed by the Department of Veterans Affairs or any government agency. All figures are illustrative estimates as of July 2026, not a loan offer or quote; actual costs, fees, and eligibility vary by transaction, property, and borrower qualification. All loans subject to credit approval.

Frequently Asked Questions

How much down payment do I need for a VA loan in Texas?

Qualified veterans with full entitlement can buy with $0 down and no monthly mortgage insurance. A down payment is optional and can reduce the one-time VA funding fee.

What is the VA funding fee in 2026?

For first use with less than 5% down, the funding fee is 2.15% of the loan amount; subsequent use is 3.30%. It drops to 1.50% with 5% down and 1.25% with 10% down. Veterans receiving VA disability compensation are exempt from the fee entirely.

What credit score do I need for a VA loan?

The VA sets no minimum credit score. Individual lenders set their own requirements, commonly around 620, and requirements vary by lender — which is why shopping multiple lenders matters.

Do disabled veterans pay property taxes in Texas?

Texas veterans with a 100% service-connected disability rating or individual unemployability qualify for a full homestead property tax exemption. Partial ratings from 10–90% receive exemptions of $5,000–$12,000 of assessed value.

Can I use a VA loan more than once?

Yes. VA entitlement is reusable and can be restored after a home is sold and the loan repaid. Many veterans also have remaining entitlement for a second purchase while still owning a VA-financed home.