Texas may have the most to gain from VA loans compared to any other state: There are more veterans here than anywhere else in the country, numbering over 1.4 million1 plus another 116,000 active duty service members.2 For these individuals, using a VA loan could be an important step towards buying a house in Texas.
VA loans are backed by the Department of Veterans Affairs (VA) but issued by private lenders. If you can navigate the eligibility requirements and application process, VA loans offer some of the most affordable rates and terms for homebuyers. The following offers a guide to VA loans in Texas for all service members and spouses living there.
VA mortgages are home loans that are guaranteed or backed by the Department of Veterans Affairs (VA). The VA agrees to insure a portion of the loan which lowers the lender’s financial risk. In return, lenders offer more affordable financing options than traditional loans — like low-to no down payment required and some of the lowest interest rates on the market.
VA guaranteed loans have been around since 1944 when President Franklin D. Roosevelt signed the original Servicemen’s Readjustment Act (also known as the GI Bill of Rights) into law. The bill was designed to help veterans achieve the dream of homeownership by offering them a federally-backed loan with no down payment. Today, active-duty service members, veterans, and certain military spouses are entitled to these benefits, provided they meet eligibility requirements.
VA loans work the same in Texas as they do elsewhere. Qualified veterans start by shopping for VA-approved lenders and getting pre-approved. Once they find a house and sign a purchase agreement, they go through the VA home appraisal and inspection process. After the home passes, they undergo mortgage underwriting and close on their new home.
Qualified veterans can also use a VA loan for a cash-out refinance or a “streamline refinance” to reduce their interest rates.
At Orchard, we’ve created a real estate solution to bring certainty to buying and selling your home at the same time. We’re experienced in working with VA loan buyers and our service can be especially helpful for active duty service members dealing with a permanent change of station (PCS). Our Move First service helps you move out on your schedule and line up closing dates to avoid the potential delays and costs that can come with a PCS.
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VA loans are a powerful tool for veterans and active-duty service members to reap the benefits of homeownership. Here are some of the advantages of VA loans over other types of mortgages:
There is no limit to VA loans in Texas, but that doesn’t mean that lenders are willing to write a blank check. VA loan borrowers are subject to lender evaluation and limits, which can cap the amount that they’re able to qualify for.
Typically, though, borrowers with their full VA loan entitlement — the amount of money veterans are entitled to by the VA — are eligible for loans up to four times the entitlement amount, as long as their income and credit are in good shape.
The exact amount of entitlement depends on the county loan limits where you’re purchasing the home. As of 2023, the conforming loan limit for borrowers in Texas was $726,200.
Just like with a standard mortgage, you’ll need to show your lender that you have sufficient income and satisfactory credit to afford a home. In order to do so, you’ll usually have to provide financial documentation including:
In addition to these typical requirements, VA loan applicants must also submit a Certificate of Eligibility (COE). This document helps verify that you have met the necessary service requirements to be eligible for a VA loan. The requirements are as follows:
In addition to eligibility requirements guidelines for veterans, there home must meet the following requirements:
Active service members may wonder if buying a house will tie them down. After all, more than 400,000 service members make a PCS move every year.3
There’s typically no requirement for how long you have to live in the VA loan home before selling. VA loans also don’t have any prepayment penalties (a fee if you end your mortgage early), so there’s no need to worry about that if you’re considering selling.
However, if you end up getting a PCS order, you may have to deal with the task of selling your home in a short period of time. Luckily, Orchard can help. Our List with Orchard service offers you a guaranteed offer and stress free listing prep with Concierge service that can make value-boosting updates at no upfront cost to you. We’ll help you list on the open market to sell for top dollar with the peace of mind of a guaranteed home sale.
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